Global oil prices declined on Wednesday following a revised supply forecast from the International Energy Agency (IEA), with investors cautiously awaiting Friday's high-stakes meeting between US and Russian leaders to address geopolitical tensions impacting energy markets.
Brent crude futures fell 0.7% to $65.67 per barrel, while US West Texas Intermediate (WTI) crude dropped 0.8% to $62.64, extending losses from earlier sessions. The shift comes as the IEA raised its 2023 oil supply growth projections following OPEC+ production decisions, while trimming demand forecasts amid economic headwinds in major economies.
Analysts point to Friday's planned US-Russia dialogue in Alaska as a key market driver. President Donald Trump and President Vladimir Putin are expected to discuss resolving the Russia-Ukraine conflict, which has disrupted energy flows since 2022. PVM Oil analyst Tamas Varga noted: "Prices softened on expectations that the summit won't trigger new sanctions, preserving Russia's oil exports to Asian markets."
Market dynamics remain complex, with OPEC's latest monthly report offering countervailing signals. The organization increased its 2024 global oil demand forecast while reducing projections for non-OPEC+ supply growth, suggesting tighter future markets. This contrasts with the US Energy Information Administration's prediction of Brent averaging below $60 in Q4 2023 – potentially the lowest quarterly price since 2020.
Investors are also digesting fresh US inventory data showing a 1.52 million barrel crude stockpile increase last week, though gasoline reserves declined. These mixed signals reflect the delicate balance between supply adjustments and evolving demand patterns across energy markets.
