Oil prices slipped on Wednesday as concerns over a build-up in U.S. crude inventories outweighed supply disruptions in Kazakhstan and ongoing geopolitical tensions linked to U.S. tariff threats.
Brent crude futures fell 76 cents, or 1.2%, to $64.16 per barrel, while U.S. West Texas Intermediate (WTI) declined 60 cents, or 1%, to $59.76 per barrel. The drop comes a day after both benchmarks had climbed nearly 1.5% on supply-side concerns and strong Chinese economic data.
U.S. inventory build pressures prices
The primary factor weighing on oil markets is the expectation that U.S. crude stockpiles increased sharply last week. According to a preliminary Reuters poll, analysts estimate that crude inventories rose by around 1.7 million barrels in the week ended January 16. Rising inventories typically signal weaker demand or oversupply, putting downward pressure on prices.
Markets are now awaiting inventory data from the American Petroleum Institute (API) later on Wednesday and the U.S. Energy Information Administration (EIA) on Thursday, both delayed by a U.S. federal holiday earlier this week.
Kazakhstan outages offer limited support
Oil prices had found support in the previous session after Kazakhstan temporarily halted production at the Tengiz and Korolev oilfields due to power distribution issues. Tengiz is one of the world’s largest oil fields, and industry sources suggest output could remain offline for another seven to ten days.
However, analysts note that the disruption is temporary, limiting its ability to offset broader bearish factors such as rising inventories.
Geopolitics adds uncertainty, not support
Additional pressure came from geopolitical uncertainty after U.S. President Donald Trump reiterated his intention to gain control of Greenland and threatened fresh tariffs on European countries if no deal is reached. Markets fear that such tariffs could slow global economic growth, weakening oil demand.
While tensions involving Iran and the Middle East could still provide upside risks to crude prices, analysts say these concerns are currently being overshadowed by inventory data and growth-related worries.
What markets are watching next
Traders are closely monitoring upcoming U.S. inventory reports and developments around U.S. trade policy. While geopolitical risks remain elevated, near-term oil price direction is likely to be driven by demand signals and stockpile data, keeping crude under pressure for now.