Oil prices have continued to decline, with Brent crude trading below $65 a barrel and West Texas Intermediate above $61. This drop follows a second consecutive week of rising commercial crude inventories in the US, raising concerns about an oversupplied market. Despite the upcoming summer driving season, demand for gasoline and distillates remains weak, contributing to the downward pressure on prices. The overall market sentiment is further dampened by broader financial market selloffs, driven by concerns over the US fiscal deficit and waning investor appetite for US assets.

Geopolitical tensions, particularly regarding US-Iran relations and the ongoing war in Ukraine, are also influencing oil market dynamics. While there are discussions about potential sanctions on Russian oil, the immediate impact on supply remains uncertain. Analysts suggest that geopolitical headlines may provide temporary price support, but without imminent supply disruptions, the bearish trend in oil prices is likely to persist. OPEC's strategy to increase output amidst these conditions further complicates the market outlook, as it may exacerbate the oversupply situation.