U.S. crude oil inventories rise sharply, upending forecasts

U.S. crude oil inventories rose by 3.6 million barrels last week, the Energy Information Administration reported, defying forecasts for a decline and reversing two consecutive weeks of draws. The increase, the largest in eight weeks, pushed total inventories to 456.6 million barrels, according to data released on Wednesday.

The surprise build contrasts with the prior week’s draw of 1.4 million barrels and analyst expectations for a 2.1 million-barrel decrease. Market participants had anticipated further depletion following a period of steady draws, which had supported prices amid tight supply conditions.

The unexpected rise in stockpiles comes as global oil markets remain sensitive to geopolitical risks and refining activity. Brent crude futures fell 1.8% to $82.12 per barrel in early trading, while West Texas Intermediate (WTI) dropped 2.1% to $78.45 per barrel. The declines reflect the bearish impact of higher inventory levels on near-term price sentiment.

Analysts attributed the inventory surge to a combination of factors, including reduced refinery runs and potential adjustments in import volumes. Some market watchers noted that the data may signal a temporary softening in demand, though broader trends remain contingent on macroeconomic conditions and OPEC+ policy decisions.

The EIA’s report follows a period of volatility in oil markets, where prices had been supported by supply constraints and geopolitical tensions in key producing regions. The latest figures underscore the challenges in accurately forecasting inventory movements amid shifting market dynamics.