WTI falls to near $70.50 as supply concerns ease following Trump-Putin discussion

• WTI price depreciates following discussions between Trump and Putin to initiate negotiations aimed at ending the Ukraine war.
• The dollar-denominated Oil faces challenges as rising US inflation reinforces odds that the Fed will maintain its hawkish policy stance.
• EIA Crude Oil Stocks Change reported a 4.07 million-barrel increase last week, against an expected 2.8 million-barrel rise.

West Texas Intermediate (WTI) Oil price continues its downward trend for the second straight day, trading around $70.60 per barrel during early European hours on Thursday. The decline comes as market risk sentiment softens following discussions between US President Donald Trump and Russian President Vladimir Putin. The two leaders agreed to initiate negotiations aimed at ending the ongoing war in Ukraine, fueling speculation that a resolution could ease supply concerns from one of the world's largest Oil exporters.

The dollar-denominated crude market also faces pressure from rising US inflation, reinforcing expectations that the Federal Reserve (Fed) will maintain its hawkish policy stance. Higher interest rates for an extended period slow economic activity in the United States, the world's largest Oil consumer, weighing on overall demand.

Additionally, the White House suggested late Wednesday that President Trump might announce his reciprocal tariff plan before meeting Indian Prime Minister Narendra Modi on Thursday, according to CNBC. Trump has recently indicated his intention to impose tariffs on countries that levy import duties on the US, heightening fears of a global trade war and adding to inflationary concerns.

A larger-than-expected buildup in US crude inventories further put downward pressure on Oil prices. Data from the Energy Information Administration (EIA) on Wednesday showed US crude stockpiles increased by 4.07 million barrels for the week ending February 7, surpassing the anticipated 2.8 million-barrel rise.

Meanwhile, OPEC maintained its outlook for strong global oil demand growth in 2025, citing robust air and road travel. The organization, in its latest monthly report, projected world oil demand to increase by 1.45 million barrels per day (bpd) in 2025 and by 1.43 million bpd in 2026, per Business Standard. OPEC does not anticipate that potential trade tariffs will significantly impact economic growth.