Oil drops after IEA raises supply forecasts, and ahead of Trump-Putin meeting

Oil prices fell on Wednesday after the International Energy Agency (IEA) signaled that supply would outpace demand this year, while investors looked ahead to Friday’s meeting between US President Donald Trump and Russian President Vladimir Putin.

Brent crude futures dropped 41 cents, or 0.6%, to $65.71 a barrel by 10:37 GMT, while US West Texas Intermediate (WTI) crude futures fell 50 cents, or 0.8%, to $62.67. Both benchmarks had closed lower on Tuesday.

Giovanni Staunovo, commodity analyst at UBS, said: “Last night’s API oil inventory report, combined with the IEA’s downbeat oil market outlook today, put pressure on prices.”

The IEA said Wednesday it had raised its forecast for oil supply growth this year but lowered its demand estimates due to weak fuel consumption in major economies.

By contrast, the OPEC+ alliance said in its monthly report on Tuesday that it had raised its forecast for global oil demand next year and lowered its supply growth estimates for the US and other non-OPEC producers, signaling a potential tightening in the market.

Independent energy analyst Gaurav Sharma commented: “If we take the average of the IEA and OPEC’s projections for oil demand growth in 2025, between the pessimistic and optimistic ends, the modest figure—just over one million barrels per day—can easily be met by current non-OPEC supply growth alone. So I don’t see a case for prices to rally in the near term.”

In the US, the world’s largest oil consumer, crude inventories rose by 1.52 million barrels last week, according to market sources citing Tuesday’s API data. Gasoline stocks fell, while distillate inventories posted a slight increase.

Analysts polled by Reuters expect today’s Energy Information Administration (EIA) report to show a 300,000-barrel drop in crude inventories last week.

Trump and Putin are set to meet in Alaska on Friday to discuss ending the Russia–Ukraine war, which has roiled oil markets since February 2022.

Staunovo added: “It’s hard to predict what Friday’s meeting might yield, especially if Europeans are not present in Alaska.”

While the Trump administration has sought to downplay expectations of major progress toward a ceasefire—describing the summit as a “listening session”—Ukraine and most European nations have stressed that lasting peace cannot be achieved without Ukraine at the negotiating table.