WTI Futures Plummet on Surprising Inventory Build and Dollar Strength
WTI futures (USOIL-F) experienced a sharp decline on September 16 due to an unexpected build in US commercial crude inventories. The weekly industry inventory data revealed a significant accumulation of crude stockpiles, which contrasted with market expectations for a drawdown.
The broad-based inventory gain was accompanied by builds in refined product stockpiles, including gasoline and distillates, signaling softer short-term refinery demand. This led to institutional market participants locking in profits following the recent rally to multi-month highs.
The downward pressure was reinforced by macroeconomic caution ahead of the Federal Reserve's monetary policy decision. Heightened rate expectations and elevated Treasury yields provided support to the US dollar, making dollar-denominated energy commodities more expensive for international buyers.