WTI Crude Falls Below $66 on Supply Glut, US Crude Build, and Tariff Pressures

WTI Crude Drops Below $66 as Oversupply Fears and Tariffs Weigh on Oil Prices

WTI Declines to $65.75 Amid Supply and Trade Pressure

West Texas Intermediate (WTI), the US benchmark crude oil, slipped to $65.75 during the early Asian session on Friday, driven by mounting concerns over global oversupply, surging US crude inventories, and renewed tariff jitters.

The recent slide follows several bearish developments, including OPEC+’s decision to increase production and a surprising jump in US crude stockpiles, both of which suggest a weakening demand outlook or an unbalanced market.

OPEC+ Hikes Output Amid Ongoing Supply Increases

In a July 6 meeting, OPEC and its allies (OPEC+) announced a fresh increase in collective production by 548,000 barrels per day (bpd) for August. This follows previous hikes of 411,000 bpd for May through July—already triple the earlier planned pace.

The consistent ramp-up in production has raised oversupply fears, especially as global demand growth shows signs of slowing. Market analysts now worry that these elevated supply levels may delay any sustained WTI rebound in the short term.

US Crude Stocks Surge Unexpectedly

Further pressuring WTI, the US Energy Information Administration (EIA) reported a massive 7.070 million barrel increase in US crude inventories for the week ending July 4, far exceeding both the prior week’s 3.835 million build and the market’s forecast for a 2 million barrel drawdown.

This data points to weak refinery demand or lower export volumes, compounding concerns of an oil market surplus.

Tariff Threats Add to Bearish Sentiment

In parallel, renewed tariff threats from the US—notably on key industrial imports—have cast doubt on global trade flows and may reduce oil demand projections. These protectionist moves, paired with a fragile global economic outlook, are amplifying bearish sentiment in the oil markets.

However, rising geopolitical tensions in the Middle East may help limit the downside, as instability in key oil-producing regions often prompts a risk premium on crude prices.