The Energy Information Administration reported a drop of 2.7 million barrels in US crude stocks last week to 440.4 million barrels, while analysts only expected a drop of 0.1 million barrels. 

Gasoline stocks fell by 4 million barrelsto 225.5 million barrels, while distillate stocks rose 0.9 million barrels to 107.8 million barrels. 

US stock indices tumbled on Wednesday after earlier data showed the US economy shrank unexpectedly in the first quarter.

Earlier data showed US GDP shrank 0.3% y/y in the first quarter, while analysts expected a growth of 0.4%.

According to the ADP survey, the US private sector added just 62 thousand new jobs in April, below expectations of 120 thousand.

Trump commented on the GDP contraction data and blamed Biden’s heritage, asserting that his economic recovery that he promised will take time.

He asserted that tariffs will have their impact soon with corporations already shifting their production to the US in record numbers.

On trading, Dow Jones fell 1.1% as of 15:44 GMT to 40102 points, while S&P 500 shed 1.4%, or 77 points to 5483 points, as NASDAQ dropped 1.8%, or 316 points to 17,148 points.

Global oil prices fell in European trade on Wednesday on track for the third loss in a row, plumbing three-week lows on grim outlook for global demand due to Trump’s tariffs, and after a surge in US crude stocks.

Global oil prices are heading for their biggest monthly loss in four days as the US-China trade escalated, while OPEC+ heads for more production hikes, and with prospects of a US-Iran nuclear deal that could unleash more supplies to the markets.

Prices

US crude prices fell 1.55% today to $59.22 a barrel, the lowest since April 10, with a session-high at $60.39.

Brent  fell 1.6% today to $62.16 a barrel, the lowest since April 9, with a session-high at $63.28.

On Tuesday, US crude lost 2.8%, while Brent shed 2.35%, the second loss in a row on global demand concerns.

Global Demand 

PVM analysts told Reuters that the trade war between the US and China still dominates investor sentiment and is still the biggest mover for oil prices.

They added that other factors, such as US-Iran nuclear talks and OPEC+ production plans are also impacting prices, but by a smaller degree than trade concerns.

Otherwise, Reuters reported that oil tankers are lining up near an old port in western Venezuela to load shipments before the expiry of the US shipping license to local and international companies by the end of May.

US Stocks

Initial data from the American Petroleum Institute showed a buildup of 3.8 million barrels in US crude stocks last week, passing estimates of a 0.4 million barrels build.

Now traders await official data from the EIA later today, expected to show a drawdown of 0.6 million barrels. 

Monthly Trades

In April, oil prices fell over 15% on track for the heftiest monthly loss since November 2021.

Oil prices recently hit four-year lows as the US-China trade war escalated.

The OPEC+ organization is also expected to hike production once more in June after an already large scheduled increase in May.

Gold prices fell in European trade on Wednesday on track for the second straight session, under pressure from the stronger US dollar before crucial US data.

Despite gold’s current decline, the precious metal is still heading for the fourth monthly profit in a row on haven demand amid the ongoing US-China trade war.

Prices

Gold prices fell 0.5% today to $3301 an ounce, with a session-high at $3328.

On Tuesday, gold lost 0.8%, the second loss in three days as the dollar rebounded and haven demand slumped.

Monthly Trades

In April, gold is up 5.5% so far this month on track for the fourth monthly profit in a row.

The precious metal hit a record high on April 22 at $3500 before entering a short-term correction.

The latest monthly profit is boosted by interest in haven demand as investors flee US assets.

Concerns grew after US President Donald Trump’s repeated attacks on Fed Chair Jerome Powell, sparking worries about the independence of the world’s largest central bank.

The Dollar

The dollar index rose 0.25% on Wednesday against a basket of major rivals, as concerns about a US recession receded with trade tensions calming down.

Trade Developments

US Treasury Secretary Scott Bessent said on Tuesday the administration is achieving a lot of progress in tariff negotiations, pointing to upcoming deals with India and South Korea, with talks ongoing with at least 17 trade partners. 

US Trade Secretary Howard Lutnick said the Trump administration already made a trade deal, with final approval awaiting in Japan before announcement. 

US President Trump also signed two executive orders to reduce the impact of auto tariffs through rebates and other measures.

US Rates

Several Fed officials don’t believe there’s an urgent need to review monetary policies soon.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.

The odds of such a cut in June stood at a healthier 65%.

SPDR

Gold holdings at the SPDR Gold Trust rose 0.86 tons yesterday to a total of 947.13 tons, away from April 9 lows.