Oil edged higher on Thursday as traders focused on the potential effects of a high-stakes meeting between U.S. and Russian leaders on global supply.
As of 08:45 ET (12:45 GMT), October Brent futures were up 0.5% at $65.94 per barrel, while West Texas Intermediate (WTI) gained 0.5% to $62.97 per barrel. Despite the intraday rise, both benchmarks remain on track to post weekly losses of roughly 1%.
Ceasefire Discussions in Alaska Take Center Stage
U.S. President Donald Trump and Russian President Vladimir Putin are scheduled to meet in Alaska on Friday to discuss terms for a potential ceasefire in Ukraine. On Wednesday, Trump warned of “severe consequences” if Putin failed to agree to peace, having previously threatened hefty tariffs on key buyers of Russian oil, including India and China.
Any implementation of these measures—or additional restrictions on Russia’s energy sector—could tighten global oil supplies and offer support to crude prices. Conversely, easing sanctions could put downward pressure on the market.
“Clearly, there’s upside risk for the market if little progress is made,” said ING analysts in a note. “This could have Trump extending secondary tariffs on other buyers of Russian energy. The expected oil surplus through the latter part of this year and 2026, combined with OPEC spare capacity, means that the market should be able to manage the impact of secondary tariffs on India. But things become more difficult if we see secondary tariffs on other key buyers of Russian crude oil, including China and Turkey.”
Supply Outlook and Rising Inventories Weigh on Oil
This week’s losses were driven by bearish signals from both the U.S. government and the International Energy Agency (IEA). The IEA said global oil supplies appear “bloated,” pointing to consistent production increases by OPEC+ throughout the year. The agency also forecast a looming supply glut in 2025 and 2026 and predicted a slowdown in demand in the near term, projecting a surplus of 3 million barrels per day in 2026.
Further pressure came from U.S. data showing a 3 million-barrel increase in crude inventories last week, far above expectations for a 0.9 million-barrel draw. Analysts noted this build reflects the winding down of the U.S. summer travel season, which typically drives three months of strong fuel demand before declining through autumn and winter.
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