Oil settles lower amid concerns over weak US demand

Oil drilling rigs

Oil prices declined today, May 14, amid concerns about weak US demand after official data showed a decline in US crude inventories last week.

Brent crude futures for July delivery fell 0.81%, or 54 cents, to settle at $66.09 a barrel. WTI crude futures for June delivery fell 0.82%, or 52 cents, to settle at $63.15 a barrel.

Data released today by the US Energy Information Administration showed that US commercial crude oil inventories rose by 3.5 million barrels last week, contrary to expectations for a decline of 1.8 million barrels.

The data indicated that US net crude imports rose by 422,000 barrels per day during the seven-day period ended May 9.

Meanwhile, OPEC maintained its forecast for global oil demand growth for the current and next year at 1.3 million barrels per day in its monthly report.

However, it lowered its forecast for oil supply growth from the US and other producers outside the OPEC+ alliance to 800,000 barrels per day in 2025—down from 900,000 barrels per day in the last month's estimate.

Today's negative performance by oil comes after a rise since the beginning of this week, against the backdrop of the US and China's agreement to mutually reduce tariffs, which has calmed fears of a global and US economic recession.

Michael Feroli, Chief Economist at JPMorgan, explained in a note that the probability of a US recession this year is now less than 50%, compared to his previous estimate of 60% before the truce with China.