Oil prices dipped in Asian trade on Wednesday after a four-day rally. An unexpected increase in U.S. crude stocks and President Trump’s recent Middle East visit tempered earlier optimism stemming from a U.S.-China tariff truce and softer inflation data.

Crude Prices Decline Amid Inventory Surprise

• Brent (June): –0.4% to $66.38/barrel

• WTI (June): –0.4% to $63.01/barrel
  (as of 22:02 ET / 02:02 GMT)

Tuesday saw oil prices surge over 2.5%, approaching a two-week high, but both benchmarks pulled back as the American Petroleum Institute reported an unexpected build in U.S. crude inventories.

Tariff Truce Sparks Initial Optimism

Details on the U.S.-China Deal

• U.S. reduced tariffs on China to 30% from 145%

• China lowered duties on U.S. goods to 10% from 125%

• A 90-day pause fueled a risk-on shift, raising expectations of stronger oil demand.

Softer U.S. Inflation

• April CPI increase was 2.3% YoY (vs. 2.4% expected) and 0.2% MoM

• Contained inflation bolstered hopes that reduced tariffs won’t reignite price pressures, supporting economic growth and crude demand.

Middle East Developments Impacting Market Sensitivity

• Trump’s Saudi Visit:

  • Promised to lift sanctions on Syria

  • Secured $600 billion in investments from Saudi Arabia for the U.S.

• Iran Sanctions Impact: U.S. Treasury has targeted companies transporting Iranian oil to China, raising supply-side uncertainties following recent progress in nuclear dialogues.

Unexpected Inventory Boost and Technical Analysis

The API’s weekly report indicated a surprise rise in U.S. crude inventories, contrary to forecasts for a reduction, which limited price gains. Traders now await the EIA’s official inventory data for further insights.

What Investors Need to Monitor

1. EIA Inventory Release: A larger-than-anticipated build could lead to further price declines.

2. Middle East Political Signals: Any developments in U.S.-Gulf relations or tensions with Iran will affect supply outlooks.

3. Ongoing Trade Talks: Progress beyond the current tariff pause could strengthen longer-term demand predictions.

Utilizing real-time oil data along with critical inventory updates and geopolitical events will allow investors and traders to navigate upcoming shifts in the crude market.