Oil prices drop to two-month lows
Brent crude futures settled down 49 cents, or 0.7%, to $65.63 a barrel
Oil prices dropped to over two-month lows on Wednesday after bearish supply guidance from the U.S. government and the International Energy Agency, while investors eyed U.S. President Donald Trump’s threat if Russia’s Vladimir Putin blocked peace in Ukraine.
Brent crude futures settled down 49 cents, or 0.7%, to $65.63 a barrel. During the session it dropped to $65.01 a barrel, the lowest since June 6.
U.S. West Texas Intermediate crude futures fell 52 cents, or 0.8%, to $62.65 a barrel. The contract fell to $61.94 a barrel, the lowest since June 2.
U.S. crude stocks rose by 3 million barrels to 426.7 million barrels, the Energy Information Administration said on Wednesday. Analysts in a Reuters poll had expected a 275,000-barrel draw.
Net U.S. crude imports rose last week by 699,000 barrels per day, EIA said.
These crude exports remain subpar from what we got used to, falling due to tariff pushback, said John Kilduff, partner at Again Capital in New York, adding continued lower exports could weigh on prices.
The International Energy Agency on Wednesday raised its forecast for oil supply growth this year but lowered its demand forecast.
Trump is expected to meet with Putin in Alaska on Friday to discuss ending Russia’s war in Ukraine, which has shaken oil markets since February 2022.
Meanwhile, in its monthly report on Tuesday, OPEC+ raised its global oil demand forecast for next year and trimmed estimates of supply growth from the US and other producers outside the wider group, pointing to a tighter market.
Were we to take an aggregate of the respective IEA and OPEC oil demand growth projections for 2025 at their respective bearish and bullish ends, even a modest middle figure, say just north of 1 million bpd, can easily be serviced by non-OPEC supply growth alone at the moment, said independent energy analyst Gaurav Sharma.
So, I don’t see a bullish case for oil over the near-term horizon, he said.