Oil Steadies After IEA Casts Gloomy Outlook for Months Ahead
Crude held near $66 a barrel after the International Energy Agency said oil markets are set to see a growing surplus at the end of this year and into next.
The Brent and West Texas Intermediate futures benchmarks were both little changed. Oil inventories are set to grow at the fastest pace on record next year and hit a 46-month high in June, the agency said, a day after the US government also bolstered its view for a surplus this year.
Against that backdrop, traders are looking ahead to a meeting between US President Donald Trump and his Russian counterpart in Alaska on Friday geared toward ending the war in Ukraine.
Ukrainian President Volodymyr Zelenskiy said he won’t cede the eastern region of Donbas to Russia — a condition demanded by Putin to unlock a ceasefire — and pushed for Kyiv to be included in the talks. The country claimed an attack on a Russian oil-pumping station on Wednesday, though the impact was unclear and it wasn’t possible to independently verify Ukraine’s claims.
Oil traders are tracking preparations for the talks, given that they may result in an easing of US sanctions on OPEC+ member Russia. Prices have fallen this year as the producer group accelerated output hikes, though moves have been more muted in recent days amid thin summer trading.
“Markets continue to remain in a wait and see approach as we await the big Trump-Putin meeting in Alaska,” said Keshav Lohiya, founder of consultant Oilytics.
The US Department of Energy’s view also included a forecast of declining American oil production next year. Before then, though, output is set to hit a record this year, partly thanks to increased efficiency from existing wells.
Meanwhile, a US industry report showed nationwide stockpiles increased slightly last week. Official data will be published later Wednesday.
Source: Bloomberg
