Global oil markets recorded a significant decline due to an unexpected rise in U.S. crude inventories, reigniting concerns about oversupply and weakening demand. Data from the U.S. Energy Information Administration revealed an increase of 3.454 million barrels for the week ending May 9, compared to market expectations of a nearly one-million-barrel decrease. These figures followed an even larger build reported by the American Petroleum Institute, further intensifying market anxiety.
This data reinforces signals of a weak balance between supply and demand, especially amid a rise in U.S. crude imports by around 422,000 barrels per day. At the same time, the OPEC+ alliance continues to increase output, with group exports expected to rise in May and June. OPEC’s production is estimated to have grown by 411,000 barrels per day since April.
This expansion in supply contrasts with expectations for stable demand, raising the likelihood of a supply surplus in the second half of the year. Despite some positive signs of easing global trade tensions, these have yet to translate clearly into actual demand growth.
Meanwhile, the U.S. dollar strengthened on the back of improved economic sentiment, which added pressure on oil prices, as dollar-denominated commodities become less attractive to non-U.S. investors.
Overall, recent market movements reflect growing concern about the future trajectory of global demand, amid flexible and expanding supply dynamics — placing oil prices under structural pressure rather than experiencing mere short-term volatility.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
