Crude oil futures held steady on Tuesday after plunging to their steepest decline in over three weeks, as traders reassessed global supply dynamics and demand forecasts. The move impacted related energy benchmarks and equities.
- Brent crude dropped 4.2%, closing below $82/barrel
- WTI fell 4.5% to $78.30/barrel
- U.S. crude inventories rose by 2.8 million barrels
- Heating oil (HO=F) declined 3.8%
- USO ETF dropped 2.6%
- Distillate stock draw was 500,000 barrels, below expectations
Oil prices stabilized after dropping sharply on Monday, marking the largest single-day decline in three weeks. Brent crude futures fell by 4.2% during the session, closing below $82 per barrel, while U.S. West Texas Intermediate (WTI) declined 4.5%, settling at $78.30. The sell-off followed a surge in global inventories and renewed concerns about weakening demand in key markets, particularly China and Europe. Market participants pointed to a 2.8 million barrel increase in U.S. crude stockpiles, exceeding expectations by 1.5 million barrels, as a primary catalyst. Meanwhile, the Energy Information Administration reported a 500,000-barrel draw in distillate fuel stocks, suggesting industrial consumption may be softening. These figures contributed to a broader risk-off sentiment across commodity markets. The price correction extended to refined products, with heating oil futures (HO=F) dropping 3.8% and gasoline futures (RBOB) declining 3.1%. The decline in product margins pressured downstream energy stocks, including those in the energy utilities sector. ETFs tracking energy exposure, such as USO, slipped 2.6% on the day, reflecting investor caution. Despite the drop, markets showed signs of stabilization by Tuesday’s close, with traders awaiting upcoming data on OPEC+ production decisions and U.S. economic indicators. Analysts noted that the recent volatility underscores the sensitivity of oil markets to inventory shifts and macroeconomic signals, particularly in light of ongoing geopolitical tensions and fluctuating demand forecasts.