Oil prices fall ahead of US inventory data

Oil drilling rigs

Oil prices declined today, Feb. 20, as investors awaited official data on US crude inventories, after the American Petroleum Institute (API) estimated that they rose last week.

Brent crude was trading down 0.13% at $75.94 a barrel, at 09:20 am Makkah time.

West Texas Intermediate (WTI) crude for April delivery fell 0.24% to $71.93 per barrel, while its counterpart for March delivery (which expires today) declined 0.42% to $71.95 per barrel.

The API said in a report on Feb. 19 that oil inventories in the US rose by about 3.34 million barrels during the week ended Feb. 14, with gasoline inventories increasing by more than 2.8 million barrels.

These estimates indicate a decline in fuel demand in the US, and investors are awaiting today the release of actual inventory data from the Energy Information Administration, amid expectations of an increase of 3.2 million barrels.

US President Donald Trump's threat to impose a 25% tariff on cars, chips and medicines has put pressure on oil prices due to the risks of rising costs of producing consumer goods and declining demand for them, and thus a slowdown in global economic activity, Reuters reported.

This coincides with expectations that the Federal Reserve will slow the pace of monetary easing in the near term, as policymakers fear the inflationary effects of the Trump administration's trade policies.