Oil Prices Dip as U.S. Crude Stocks Surge, Markets Brace for Trump’s Tariff Moves

Oil prices slipped in early Asian trading on Wednesday, retreating from a two-week high after U.S. inventory data revealed an unexpected spike in crude stockpiles. Brent crude futures for September delivery fell 0.3% to $69.91 per barrel, while West Texas Intermediate (WTI) dropped 0.4% to $68.10.

The dip followed gains on Tuesday driven by concerns over supply disruptions after fresh Houthi attacks in the Red Sea. A drone and speedboat strike on the Liberian-flagged, Greek-operated vessel Eternity C killed four crew members off Yemen’s coast, escalating geopolitical risks.

Market sentiment shifted after the American Petroleum Institute (API) reported a surprising 7.1 million-barrel build in U.S. crude inventories for the week ending July 4, far above the expected 2.8 million-barrel draw. This marked the largest weekly build since January. Meanwhile, gasoline inventories fell by 2.2 million barrels and distillates declined by 800,000 barrels, signaling potential demand weakness.

Traders now await confirmation from the Energy Information Administration (EIA) later Wednesday. A similar reading would reinforce concerns about oversupply in the U.S. market, potentially weighing further on crude prices.

Adding to market uncertainty, U.S. President Donald Trump on Tuesday announced a 50% tariff on copper imports and hinted at further tariffs on semiconductors and pharmaceuticals. The move follows tariff letters sent to 14 countries, with levies of up to 40% and a blanket 25% tariff on all Japanese and South Korean goods starting August 1. Trump indicated more announcements involving “a minimum of seven countries” would follow.

With rising geopolitical tensions and trade policy shifts, oil markets remain on edge amid growing volatility and supply-demand imbalances.