Global oil market is experiencing price uncertainty following International Energy Agency (IEA) forecasts of growing glut.
Reacting to the projections oil prices edged lower on Friday, heading for a weekly loss of nearly 3 per cent after the IEA forecast a growing glut and U.S. President Donald Trump and Russian President Vladimir Putin agreed to meet again to discuss Ukraine.
Brent crude futures were down 9 cents, or 0.15 per cent, at $60.97 a barrel at while the U.S West Texas Intermediate futures were 4 cents lower, down 0.07 per cent at $57.42.
Trump and Putin agreed on Thursday to another summit on the war in Ukraine, to be held in the next two weeks in Hungary.
The surprise development came as Ukrainian President Volodymyr Zelenskiy was headed to the White House on Friday to push for more military support, including U.S.-made long-range Tomahawk missiles, while Washington pressured India and China to stop buying Russian oil.
“Now that the two leaders are expected to meet, it could be a sign that the U.S.’s stance on Russia may ease. If so, that should push prices lower,” said Tamas Varga, analyst at PVM.
Ukrainian drone strikes on Russian refineries and the threat of secondary sanctions on buyers of Russian oil such as India and China set a floor under the market, but this could now change, Varga said.
This week’s decline was also partly due to rising trade tensions between the U.S. and China, which added to concerns about an economic slowdown and lower energy demand.
“It just demolishes confidence,” said Jorge Montepeque, managing director at Onyx Capital Group. He expects the U.S. economy will quickly be impacted.
Also weighing on prices was the International Energy Agency’s outlook for a growing supply glut in 2026. The Energy Information Administration said on Thursday that U.S. crude inventories increased by 3.5 million barrels to 423.8 million barrels last week, compared with analysts’ expectations in a Reuters poll for a 288,000-barrel rise.
The bigger-than-expected build in crude inventory was largely due to lower refining utilization as refineries go into autumn turnarounds.
The data also showed a rise in U.S. production to 13.636 million barrels per day, the highest on record.