WTI drops to seven-week lows below $80.00 on surprise build crude inventories
- WTI prices loses momentum near seven-week lows of $79.20 on Thursday.
- A surprise build in US crude stocks weighs on black gold prices.
- WTI prices edge lower amid signs of easing Middle East geopolitical tensions.
- The US employment reports on Friday will be closely watched.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.20 on Thursday. The black gold edges lower to the lowest level in seven weeks due to a surprise build in crude inventories in the United States and easing geopolitical tensions in the Middle East.
US crude inventories for the week ending April 26 rose by 7.256 million barrels to 460.9 million barrels, compared to a 6.368 million barrel draw in the previous week. The market consensus estimated that stocks would decrease by 2.3 million barrels, according to the US Energy Information Administration (EIA) on Wednesday. This figure registered the highest since June 2023, adding to concerns about a weakening oil demand.
Furthermore, the signs of easing geopolitical tensions in the Middle East drag WTI prices lower. According to Bloomberg, the United States and Saudi Arabia are discussing an agreement that would provide Riyadh security guarantees and possible diplomatic ties with Israel if its government ends the war in Gaza. Nonetheless, the rising geopolitical risks could raise the fear of oil supply disruption in the region and lift the black gold price.
Oil traders will shift their attention to US employment data for April on Friday for fresh impetus, including Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.