WTI Crude plunges to two-month low as surprise US stock build stokes oversupply fears

WTI Crude Oil falls nearly 2.0% to $61.50 on Wednesday, its lowest since early June.
EIA reports a 3.0 million barrel increase in US crude inventories vs. expectations for a 900K draw.
OPEC raises 2026 global Oil demand growth forecast to 1.38 million barrels per day.

West Texas Intermediate (WTI) Crude Oil slumped further on Wednesday, falling below the psychological $62 mark and hitting its lowest level since early June. The fresh wave of selling came after official data from the US Energy Information Administration (EIA) revealed a surprise build in crude inventories, sparking renewed concerns about oversupply and weakening demand conditions in the world’s largest Oil consumer. At the time of writing, WTI is trading around $61.50 per barrel, down over 1.9% on the day.

According to the EIA’s Weekly Petroleum Status Report, US commercial crude inventories increased by 3 million barrels in the week ending August 8, defying market expectations for a draw of around 900,000 barrels. The build also reversed the previous week’s decline of over 3 million barrels, highlighting the fragility of the supply-demand balance heading into late summer.

Refinery inputs rose marginally, averaging 17.2 million barrels per day as refineries operated at 96.4% of capacity. However, the jump in imports was more pronounced — US Crude Oil imports surged by 958,000 barrels per day, averaging 6.9 million barrels per day on the week. While gasoline and distillate fuel production both increased slightly, the inventory build suggests supply growth continues to outpace demand.

From a demand perspective, the report revealed cracks in consumption. Total products supplied — a proxy for overall demand — averaged 21.2 million barrels per day over the past four weeks, up 2.9% YoY. However, motor gasoline product supplied fell by 1.5%, and distillate fuel demand dropped 1.6%, suggesting underlying weakness in consumer and industrial usage. While gasoline and distillate fuel production also saw modest weekly increases, the surprise stock build strongly suggests that supply continues to outpace end-user demand.

Meanwhile, the broader market tone remains under pressure amid a diverging global Oil outlook. The Organization of the Petroleum Exporting Countries (OPEC) released its August Monthly Oil Market Report on Tuesday, painting a more optimistic medium-term demand scenario. The cartel raised its 2026 global oil demand growth forecast to 1.38 million barrels per day, citing improving economic conditions in key regions, including the United States, Europe, and the Middle East.

OPEC also revised down its non-OPEC supply growth expectations, including a 100,000 barrel per day reduction in projected US shale output for 2026. In parallel, the group lifted its 2025 global GDP forecast to 3.0%, highlighting resilient trade flows and steady industrial activity as supportive factors for long-term crude demand.

However, this upbeat view was countered by a more cautious outlook from the International Energy Agency (IEA). In its latest monthly report, the IEA raised its 2025 global supply growth forecast to 2.5 million barrels per day, reflecting increased OPEC+ output and a ramp-up in refining activity. The agency simultaneously trimmed its global oil demand forecast to 680,000 barrels per day, citing high prices and economic uncertainty as potential headwinds.

The bearish EIA data and the IEA’s oversupply warnings are weighing heavily on sentiment, even as OPEC offers a more constructive long-term outlook. Traders are also monitoring Friday’s US–Russia peace summit in Alaska, which could influence global energy flows and geopolitical risk premiums.

Brent Crude Oil FAQs

Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered ‘light’ and ‘sweet’ because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world’s internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply.

Like all assets supply and demand are the key drivers of Brent Crude Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of Brent Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of Brent Crude Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact Brent Crude Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

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