Crude Oil Futures Decline Amid US Inventory Build Report

On Thursday morning, crude oil futures experienced a drop following the release of an industry report indicating a rise in crude oil inventories in the United States. Specifically, March Brent oil futures stood at $78.74, reflecting a decrease of 0.33 percent, while March crude oil futures for West Texas Intermediate (WTI) were priced at $75.22, down 0.29 percent.

Market Performance

During the early trading hours, February crude oil futures were quoted at ₹6513 on the Multi Commodity Exchange (MCX), which is a decline of 0.73 percent from the prior close of ₹6561. Additionally, March futures were trading at ₹6472 compared to the previous closing of ₹6516, marking a drop of 0.68 percent.

Inventory Data Insights

The latest data from the American Petroleum Institute (API) revealed an increase of 1 million barrels in the US crude oil inventories for the week ending January 17. This uptick in inventories marks the first rise observed after five consecutive weeks of falling inventory levels.

Upcoming Official Data

Investors are also awaiting the official data from the US Energy Information Administration (EIA), which is slated for release later on Thursday. This report will provide a more comprehensive perspective on crude oil inventory levels in the US for the same week.

Geopolitical Considerations Impacting Markets

Market analysts are closely monitoring the potential effects of a new policy implemented by US President Donald Trump that includes imposing tariffs on various nations. There is a prevailing concern that such measures could adversely affect the global economy, thereby influencing demand for commodities like crude oil.

President Trump recently issued a warning to Russia regarding possible tariffs and sanctions unless they cease military actions in Ukraine. In a statement made via the social media platform, Trump urged:

“I’m going to do Russia, whose Economy is failing, and President Putin, a very big FAVOR. Settle now, and STOP this ridiculous War! IT’S ONLY GOING TO GET WORSE.”

He emphasized the urgency of reaching an agreement, asserting that failure to do so would leave him with no choice but to apply significant tariffs on Russian goods entering the United States and other allied countries. This warning comes as Russia remains a key player in the global crude oil market.

Further Tariffs Indicated Against Other Nations

In addition to the warnings directed at Russia, President Trump has suggested imposing tariffs on the European Union and indicated a 25 percent tariff against Canada and Mexico. There has also been dialogue surrounding a potential 10 percent tariff on China.

Other Commodity Futures

In related market activity, January zinc futures were trading at ₹272.90 on the MCX, reflecting a decrease of 0.82 percent from the previous close of ₹275.15.

Futures, Inventory, Oil