NEW YORK: Oil prices fell to over two-month lows on Wednesday after bearish supply guidance from the US government and the International Energy Agency, while investors eyed US President Donald Trump's threat of "severe consequences" if Russia's Vladimir Putin blocked peace in Ukraine.
Brent crude futures settled down 49 cents, or 0.7%, to US$65.63 a barrel. During the session it dropped to US$65.01 a barrel, the lowest since June 6.
US West Texas Intermediate crude futures fell 52 cents, or 0.8%, to US$62.65 a barrel. The contract fell to US$61.94 a barrel, the lowest since June 2.
US crude stocks rose by 3 million barrels to 426.7 million barrels, the Energy Information Administration said on Wednesday. Analysts in a Reuters poll had expected a 275,000-barrel draw.
Net US crude imports rose last week by 699,000 barrels per day, EIA said.
"These crude exports remain subpar from what we got used to, falling due to tariff pushback," said John Kilduff, partner at Again Capital in New York, adding continued lower exports could weigh on prices.
The International Energy Agency on Wednesday raised its forecast for oil supply growth this year but lowered its demand forecast.
Trump is expected to meet with Putin in Alaska on Friday to discuss ending Russia's war in Ukraine, which has shaken oil markets since February 2022.
When asked whether Russia would face any consequences if Putin does not agree to stop the war after Friday’s meeting, Trump responded on Wednesday: "Yes, they will.”
Asked if those consequences would be sanctions or tariffs, Trump told reporters: "I don't have to say, there will be very severe consequences." Trump also said a meeting between the pair could swiftly be followed by a second that included the leader of Ukraine.
Meanwhile, in its monthly report on Tuesday, Opec+ raised its global oil demand forecast for next year and trimmed estimates of supply growth from the United States and other producers outside the wider group, pointing to a tighter market.
"Were we to take an aggregate of the respective IEA and Opec oil demand growth projections for 2025 at their respective bearish and bullish ends, even a modest middle figure, say just north of 1 million bpd, can easily be serviced by non-OPEC supply growth alone at the moment," said independent energy analyst Gaurav Sharma.
"So, I don't see a bullish case for oil over the near-term horizon." — Reuters
