WTI crude oil futures settled at $73.12/bbl on NYMEX, down 2.27% on the session, as a bearish inventory report and concerns about Chinese demand weighed on prices. The decline accelerated after the EIA reported a 3.2 million barrel build in US crude inventories, well above the 1.1 million barrel draw expected by analysts.
Brent crude fell to $77.01/bbl on ICE, a 1.14% decline, narrowing the WTI-Brent spread to $3.89/bbl. The smaller move in Brent reflected ongoing supply concerns in the North Sea, where maintenance schedules have reduced output.
The inventory build was driven by a 1.5 million bpd increase in US refinery utilization to 94.2%, which was insufficient to offset rising crude production. US crude output remained at a record 13.4 million bpd, adding to the supply overhang.
Chinese economic data released overnight showed industrial production growing at 4.8%, below the 5.2% forecast, raising concerns about crude demand from the world's largest importer. The Caixin Manufacturing PMI slipping below 50 added to the bearish sentiment.
Geopolitical risk premiums continued to unwind following progress in US-Iran nuclear negotiations. The 60-day oil sales license granted to Iran raised expectations of additional Iranian crude entering the market, potentially adding 500,000 bpd to global supply by Q4.
The 2.3% decline creates opportunity for buyers to refix near-term requirements. WTI in the $71–$74 range presents value given OPEC+ production constraints and the potential for supply disruptions. Consider layering in Q4 hedges at current levels.