Adding to this bearish tone, the International Energy Agency (IEA) revised its global oil supply growth estimate higher by 380,000 barrels per day, citing rising OPEC+ output. Even as the IEA slightly raised its demand projection, the agency still forecasted a surplus for the upcoming year—a signal that supply could outpace consumption even in a recovery scenario.
EIA Data Shows Surprise Inventory Build, Weakening Demand Signal
Official inventory data from the U.S. Energy Information Administration (EIA) revealed a sharp 3.5 million barrel build in crude stockpiles—far above consensus expectations of a draw. Total U.S. inventories now stand at 441.8 million barrels, reinforcing fears of sluggish demand or resilient domestic supply. The bearish inventory print followed similar findings from the American Petroleum Institute earlier in the week and added to downside pressure in futures markets, particularly on Thursday when WTI plunged more than 3%.
Trade Truce with China Offers Limited Upside Potential
On the demand side, traders found some support from a 90-day tariff pause agreed upon by the U.S. and China. The agreement, which significantly lowered trade duties between the world’s two largest oil consumers, helped revive some risk appetite. However, analysts cautioned that the short duration and lack of detail limited the longer-term demand optimism. Meanwhile, the Federal Reserve remains a wildcard, with potential rate cuts offering a possible but uncertain economic tailwind.
