WTI crude futures gained 1.1% to settle at $74.07 per barrel on Wednesday, snapping a five-day losing streak. This rebound was driven by optimism over a potential Federal Reserve rate cut in September, which outweighed the rise in US crude and fuel stocks. The likelihood of the Fed lowering borrowing costs in September is now at 69%, a move that could stimulate economic activity and boost oil demand. EIA data revealed that US crude inventories increased by 1.233 million barrels last week, a reversal from the previous week’s 4.156 million barrel decline and contrary to market expectations of a 2.3 million barrel draw. US gasoline and distillate stocks also rose more than anticipated. On Sunday, OPEC+ agreed to extend most of their supply cuts into 2025 but allowed for voluntary cuts from eight member countries to be gradually unwound starting in October. By December, over 500,000 bpd are expected to re-enter the market, with a total of 1.8 million bpd returning by June 2025.
