Crude Oil Futures Approach Pre-War Levels as Market Stabilizes.

Crude oil prices extended their decline for the fourth consecutive session, approaching pre-war levels as U.S. supplies continue to improve. As of Thursday morning, September Brent futures fell 1.33% to $72.89, while August WTI futures dropped 1.39% to $69.36. In the Indian market, July crude traded at ₹6568, marking a decline of 1.51%. The U.S. Energy Information Administration reported a significant decrease in commercial crude oil inventories by 6.1 million barrels, which indicates persistent supply pressures even against declining prices.

The decrease in U.S. inventories can primarily be attributed to a combination of recovering production levels and geopolitical factors. U.S. Energy Secretary Chris Wright noted that flows through the crucial Strait of Hormuz are nearing pre-conflict levels, with approximately 20 million barrels passing through recently. Furthermore, U.S. President Donald Trump emphasized sanctions relief for Iran aimed at facilitating food purchases, further influencing the global supply architecture. This backdrop of improved supply conditions, alongside stagnant demand growth—evidenced by a slight reduction in motor gasoline supplied—contributes to the downward pressure on prices.

For traders and investors, the short-term outlook appears bearish as the trend of inventory builds and easing geopolitical tensions may lead to continued price declines. With Brent and WTI trading near psychologically significant support levels, further declines could entice speculative selling. However, any unexpected uptick in demand, particularly from recovering economies or seasonal factors, could provide volatile trading opportunities. While market participants should remain vigilant to unexpected geopolitical events or shifts in demand dynamics, the prevailing trend points to a cautious approach in the near term.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)