Oil posts third weekly decline on concerns over global glut

Core Viewpoint - The oil market is experiencing a third consecutive week of losses, primarily due to signs of an impending surplus, with West Texas Intermediate prices near $57 per barrel, reflecting a 2.3% decline this week, marking the longest losing streak since March [1]. Group 1: Market Conditions - The International Energy Agency has increased its estimate for next year's global oil surplus by approximately 18% [2]. - A surge in bids for securing tank capacity at Cushing, Oklahoma, indicates that traders are preparing for an oversupply situation [2]. - Prices for flagship US oil grades have weakened, further highlighting the oversupply concerns [2]. Group 2: Geopolitical Factors - President Trump expressed that higher tariffs against China are not sustainable and is optimistic about a potential trade resolution with Xi, which may alleviate fears of reduced energy consumption due to ongoing trade tensions [3]. - Trump announced plans for a second meeting with Russian President Putin, aimed at resolving the Ukraine conflict, which could potentially drive oil prices down to $50 per barrel according to Citigroup Inc. [4]. - The ongoing geopolitical dynamics, including Western nations tightening sanctions on Russia's energy sector, are influencing market sentiment and expectations [5]. Group 3: Expert Insights - Joe DeLaura, a global energy strategist at Rabobank, noted that the oil market is currently in contango, suggesting a downward trend for crude prices unless there is an unexpected increase in demand, which is deemed unlikely [5]. - India's oil refiners are expected to reduce, but not completely halt, their purchases of Russian crude, following Trump's comments regarding India's oil buying practices [5].