Oil extends losses ahead of US inventory data

Oil prices extended their losses today, Feb. 5, despite a decline in the US dollar, pressured by forecasts for a significant rise in US petroleum product inventories amid growing concerns that a potential trade war could dampen demand.

Brent crude futures for April delivery fell by 1.45%, or $1.07, to $75.19 per barrel at 5:19 pm Makkah time.

US West Texas Intermediate (WTI) crude futures for March delivery dropped by 1.35%, or $0.98, to $71.72 per barrel.

The US dollar index, which gauges the greenback’s strength against a basket of major currencies, declined by 0.40% to 107.51 points. A weaker US dollar typically alleviates pressure on USD-denominated commodities.

The American Petroleum Institute (API) reported earlier today that US crude inventories fell by over five million barrels last week. Meanwhile, gasoline and distillate stocks increased by 5.4 million and 6.98 million barrels, respectively.

Investors are concerned that reciprocal tariffs between the US and China could limit oil demand, despite speculation about further US sanctions on the Iranian oil industry.

Investors are awaiting official US inventory data from the Energy Information Administration (EIA). Expectations suggest a 2.4-million-barrel hike over the past week.