WTI crude fell to around $64.50 a barrel, its lowest in two months, after forecasts from the IEA and US government pointed to a growing oil surplus and record-high inventories by mid-2026. US output is expected to peak this year before declining.
Analyst Rudolph noted that traders are also monitoring the upcoming US–Russia summit on Ukraine, where Kyiv’s rejection of Moscow’s territorial demands could shape the future of US sanctions on Russian oil.
IEA Warns of Record Oil Glut as Opec+ Ramps Up Output
The International Energy Agency (IEA) warned Wednesday that oil markets are becoming “ever more bloated” as supply outpaces demand, with Opec+ – led by Saudi Arabia – increasing production.
The agency cut its forecast for demand growth in 2025 to 680,000 barrels per day (bpd), the weakest since 2009 outside the pandemic, while predicting an additional 2.5m bpd of Opec output this year and 1.9m bpd in 2026, both higher than previous estimates.
Weaker consumption in China, India, Brazil, and Egypt is expected to weigh on global demand, with 2026 growth now seen at 700,000 bpd. Saxo Bank’s Ole Hansen said the forecasts imply a record supply glut next year, with inventories building at 2.96m bpd – surpassing pandemic levels.
Brent crude fell 0.9% to below $66 a barrel on Wednesday and is down about 10% year-to-date, having peaked above $82 in January.
Traders are also watching Friday’s Trump–Putin meeting in Alaska, which could pressure prices further if it signals an end to the war in Ukraine.
