Oil Falls Despite US Increased Pressure on India Over Russian Oil
Oil prices fell as market participants shrugged off US efforts to force India to stop buying Russian crude, while observers highlighted the risk of a surplus in the coming months as global supply potentially exceeds demand. The global benchmark Brent dipped below $68 per barrel, while West Texas Intermediate (WTI) approached $64. White House trade adviser Peter Navarro increased pressure on New Delhi to halt purchases of Russian oil after Washington doubled import duties from the country to 50%. Calling Indians “arrogant,” he referred to the conflict in Ukraine as “Modi’s war,” referring to the Indian prime minister.
The White House singled out India for importing Russian crude, while China also a major buyer was not mentioned. Indian refineries recently signaled they would continue most purchases of Russian oil for shipments from October and beyond. Oil prices fluctuated throughout the week, with futures heading for their biggest monthly decline since April. Traders fear the global oil market will experience a surplus in the coming quarters after OPEC+ eased supply curbs, while countries outside the alliance also increased production. The US-led trade war has fueled concerns that demand will face headwinds.
“The scale of the upcoming surplus means the market outlook remains bearish,” said Warren Patterson, head of commodity strategy at ING Groep NV. “However, clearly the main upside risk to the market is the potential for tighter sanctions on Russia, along with broader secondary tariffs.”
Citigroup Inc. also highlighted its forecast for market balance toward the end of the year, saying in a note that Brent would average $66 per barrel this quarter and $63 in the final three months, when “oversupply begins to have a greater impact,” according to analysts including Anthony Yuen. Although Brent’s forward spread remains in backwardation (a positive pattern), the closely watched metric has narrowed. The gap between the two nearest contracts stood at 57 cents per barrel, down from 72 cents a month ago.
In the US, government reports on Wednesday painted a mixed picture for the domestic oil market. While refinery runs fell across all regions—bringing national figures to their lowest levels since early July—crude inventories at the Cushing, Oklahoma, hub fell for the first time in eight weeks. Brent for October settlement, which expires Friday, fell 0.8% to $66.86 per barrel at 12:08 p.m. Singapore time. The more active November contract fell 0.8% to $63.91 per barrel. WTI for October delivery fell 0.9% to $63.59 per barrel. (ayu)
Source: Newsmaker.id
