Global oil prices slid on Wednesday after the International Energy Agency (IEA) raised its forecast for oil supply growth, signaling that production will outpace demand this year. 📉
Brent crude futures dropped 0.7% to $65.67/barrel, while US West Texas Intermediate (WTI) dipped 0.8% to $62.64. Both contracts had already closed lower on Tuesday.
The market also has its eyes on Friday’s much-anticipated meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska. They’re set to discuss ways to end the Russia-Ukraine conflict that’s been rocking the oil markets since February 2022.
"Oil prices drifted lower on expectations that Friday's summit would not result in additional sanctions on Russia, ensuring the country's oil continues to flow predominantly to the south and east," said PVM Oil analyst Tamas Varga.
The IEA’s updated outlook came after OPEC+ decided to tweak its production plans. While the agency bumped up its supply forecast, it trimmed the demand outlook, citing lackluster consumption across major economies.
Meanwhile, OPEC’s latest monthly report surprised the market by raising its global demand forecast for next year and cutting its estimate for supply growth outside the OPEC+ group — hinting at a tighter market horizon.
On the US front, data from the American Petroleum Institute showed crude stocks climbed by 1.52 million barrels last week. Gasoline inventories dipped, while distillates saw a slight gain.
Plus, the US Energy Information Administration’s Short Term Energy Outlook projects Brent prices averaging below $60/barrel in Q4 — the first time prices hit that level since 2020 — as global supply growth continues to outpace demand.
For daily commuters in cities from Dhaka to Manila, this dip could bring some welcome relief at the pump ⛽️.
Reference(s):
Oil falls as IEA raises supply forecast ahead of US-Russia meeting
cgtn.com
