Oil Holds Drop With US Stockpile Climb and Geopolitics in Focus

Oil held a decline as an industry report pointed to a build in US crude stockpiles, while geopolitical concerns continued to fester, Bloomberg reported.

Global benchmark Brent was near $70 a barrel after losing 0.7% on Tuesday, while West Texas Intermediate traded below $67. The American Petroleum Institute said nationwide inventories rose by 4.6 million barrels last week, although a draw was seen at the key hub in Cushing, Oklahoma.

Geopolitical concerns over Russia and Iran remained in focus. US President Donald Trump pressed Iran to rein in the Houthis, viewing attacks from the Yemeni militant group as if Tehran were directly responsible. Russian President Vladimir Putin, meanwhile, declined Trump’s bid for a ceasefire in Ukraine, agreeing instead to limit attacks on the country’s energy infrastructure.

Investors will also watch for the US Federal Reserve interest-rate decision later on Wednesday, plus commentary from Chair Jerome Powell on the outlook as Trump amps up his trade war. There’s been a risk-off tone in wider markets recently amid concerns about a slowdown, with a selloff in equities.

Crude remains markedly lower from a peak in January, as a slew of bearish drivers combines to pressure prices. On the supply side, OPEC and its allies are preparing to increase production, while the escalating trade frictions are threatening a hit to demand just as consumption in China remains weak.

“Oil’s rebound has run out of momentum as the broader risk-off move counters re-emerging geopolitical risks, while rising US crude inventories have only added further pressure,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “Broader macro fears are likely to continue to dictate price action.”