Oil falls as IEA raises supply forecast ahead of US-Russia meeting

Oil prices fell on Wednesday after the International Energy Agency (IEA) noted supply overtaking demand this year, while investors awaited Friday's meeting between US President Donald Trump and Russian President Vladimir Putin.

Brent crude futures fell 45 cents on the same day, or 0.7 percent, to 65.67 dollars a barrel, as per Reuters, while US West Texas Intermediate crude futures edged down 53 cents, or 0.8 percent at 62.64 dollars.

Both contracts settled lower on Tuesday.

Trump and Putin are due to meet in Alaska on Friday to discuss ending the Russia-Ukraine conflict, which has shaken 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 in a note. 

The IEA on Wednesday raised its forecast for oil supply growth this year following OPEC+'s decision but lowered its demand forecast due to lacklustre demand across the major economies.

Long-term support, however, came from OPEC's updated monthly report on global supply and demand, Varga said to Reuters, which raised its global oil demand forecast for next year and trimmed its estimate for growth in supply from the United States and other producers outside the wider OPEC+ group, pointing to a tighter market.

Investors also awaited further cues after an industry report showed US crude stockpiles climbed last week.

Crude inventories in the United States, the world's biggest oil consumer, rose by 1.52 million barrels last week, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories dropped while distillate inventories gained slightly.

The US Energy Information Administration (EIA) on Tuesday in its Short Term Energy Outlook (STEO) forecast Brent prices to average less than 60 dollars per barrel in the fourth quarter, which would be the first quarter with average prices that low since 2020, stating that growth in the global oil supply would surpass growth in demand for petroleum products.

(Cover via VCG)