Oil limped to a third week of losses, weighed down by signs the market is tipping into the surplus analysts have been awaiting.
West Texas Intermediate ended the day little changed near $57 a barrel, down 2.3% this week in its longest losing streak since March.
News on oversupply kept piling up this week. The International Energy Agency raised its estimate for next year’s global overhang by about 18%. And a US storage broker reported a surge in bids for securing tank capacity at the country’s key crude hub in Cushing, Oklahoma, underscoring that traders are positioning themselves for the glut. Prices for flagship US oil grades have also weakened.
Crude traders are also following the on-again, off-again tensions between Washington and Beijing.
President Donald Trump on Friday said higher tariffs against China were not “sustainable” expressed optimism that an upcoming meeting with Xi could yield a lasting trade peace after last week threatening an additional 100% tariff on Beijing’s goods. The shift in sentiment eased some concerns that the ongoing tit-for-tat between the two biggest crude consumers could cripple energy consumption.
Trump, meanwhile, said he would hold a second meeting with Russian counterpart Vladimir Putin “within two weeks or so” aimed at ending the war in Ukraine, a scenario that stands to send prices toward $50 a barrel, according to Citigroup Inc. The US president on Friday shrugged off concerns Putin may be manipulating him.
“Crude is weighing Trump’s meeting with Putin against building evidence of oversupply,” said Joe DeLaura, global energy strategist at Rabobank. “With oil markets in contango from the second quarter of next year onward, the next path is down for crude unless demand surprises to the upside, which we view as unlikely.”
Western nations are turning the screws on Russia’s energy sector in a bid to curb the flow of petrodollars to the Kremlin and limit Putin’s ability to finance the war. India’s oil refiners said they expect to reduce — not stop — the purchase of Russian crude following remarks by Trump that the South Asian nation would halt all buying.
Oil Prices
WTI for November delivery added 8 cents to settle at $57.54 a barrel in New York.
Brent for December settlement rose 23 cents at settle at $61.29 a barrel.
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