Why Is WTI Crude Oil Falling Below $61? | Key Factors Behind the Price Drop

What's Driving WTI Crude's Recent Decline?What is the role of Solana?

The US benchmark crude oil contract traded near $60.75 during Friday's Asian session, extending its weekly losses. Market participants are evaluating multiple bearish factors that could signal further downward pressure on energy prices.

Inventory Builds and Production Signals

Recent data from the Energy Information Administration revealed an unexpected 1.328 million barrel increase in US crude stockpiles for the week ending May 16. This follows a larger 3.454 million barrel build in the prior week, contradicting analyst expectations of a 1.85 million barrel drawdown.

Simultaneously, OPEC+ members appear poised to gradually restore production capacity that was previously withheld from global markets. Industry sources suggest the cartel may implement incremental output hikes through November, potentially adding 2.2 million barrels per day to worldwide supply.

Geopolitical Developments to Monitor

Energy markets are also digesting news about renewed nuclear negotiations between US and Iranian officials scheduled for Friday in Rome. Progress in these talks could eventually lead to additional Iranian crude entering global markets, though Middle East tensions remain elevated following reports of potential Israeli military preparations.

Traders should note that fundamental supply/demand dynamics currently appear to favor the bearish case, with production growth potentially outpacing consumption increases in coming quarters. The market will closely scrutinize any official announcements from OPEC+ regarding their production strategy moving forward.