Oil prices fell on Wednesday after rising supply expectations from the United States government and the International Energy Agency (IEA), with Brent crude down by 49 cents or 0.7 per cent to $65.63 per barrel, and the US West Texas Intermediate (WTI) crude down by 52 cents or 0.8 per cent to $62.65 a barrel.
The Energy Information Administration (EIA) said on Wednesday the US crude stocks rose by 3 million barrels to 426.7 million barrels, with net US crude imports rising last week by 699,000 barrels per day.
The EIA’s data release followed the American Petroleum Institute (API) figures released a day earlier, suggesting crude oil inventories grew by 1.5 million barrels.
The IEA on Wednesday raised its forecast for oil supply growth this year but lowered its demand forecast, saying supply will rise by 2.5 million barrels per day in 2025, up from 2.1 million barrels per day previously forecast in a monthly report, and by a further 1.9 million barrels per day next year.
For demand, IEA expects world oil demand to rise by 680,000 barrels per day this year and 700,000 barrels per day next year, both down 20,000 barrels per day from the previous forecast.
This comes as the Organisation of the Petroleum Exporting Countries and other allies (OPEC+) decided to unwind its most recent layer of output cuts more rapidly than earlier scheduled. The extra supply, along with concern about the economic impact of President Donald Trump’s tariffs, has weighed on oil this year.
OPEC+ raised its global oil demand forecast for next year and trimmed estimates of supply growth from the US and other producers outside the wider group, pointing to a tighter market.
World oil demand will rise by 1.38 million barrels per day in 2026, up 100,000 barrels per day from the previous forecast. This year’s expectation was left unchanged.
Meanwhile, investors eyed US President Donald Trump’s threat of severe consequences if Russian President, Mr Vladimir Putin blocked peace in Ukraine.
The two leaders are expected to meet in Alaska on Friday to discuss ending Russia’s war in Ukraine, which has shaken oil markets since February 2022.
President Trump also said a meeting between the pair could swiftly be followed by a second that included the leader of Ukraine, President Volodymyr Zelenskyy.