Oil headed for its longest losing run since 2021, as traders judged that US efforts to end the war in Ukraine would not impact overall supplies, even as Washington penalized India for taking Moscow’s crude.
Brent fell toward $66 a barrel, down for a seventh straight session, while West Texas Intermediate was below $64. US President Donald Trump — who’d set a deadline of Friday for Moscow to agree to a truce — said that he’d be willing to meet with Vladimir Putin, even if the Russian leader hasn’t yet agreed to sit down with Ukrainian President Volodymyr Zelenskiy.
Earlier this week, Trump doubled levies on all Indian imports to 50% as a penalty for the nation taking Russian crude, prompting local state-owned oil refiners to pull back from purchases and look elsewhere. Treasury Secretary Scott Bessent, meanwhile, said the US may also impose tariffs on China at some point, when asked about targeting countries that buy Moscow’s energy.
Oil has slumped in August following three months of gains. Investors are braced for a potential glut later this year after OPEC followed through on a campaign to relax output curbs. At the same time, crude futures have been weighed down by signs of slower growth in the world’s largest economy as Trump’s wider trade tariffs took a toll on activity, posing a risk to energy demand.
“Positive signals from this week’s US-Russia talks — and plans for a direct Trump-Putin meeting — have eased concerns over Russian supply disruptions, causing a significant retreat in geopolitical risk premiums,” said Gao Mingyu, chief energy analyst at SDIC Essence Futures Co.
Oil traders, producers and users have proved adept in recent years at responding to supply challenges, whether they stem from conflict, geopolitical risks, or administrative hurdles such as sanctions and tariffs. Among signs of that flexibility this week were Russian Urals cargoes — from the nation’s west — being offered to users in China, buyers who don’t typically take such grades.
Brent’s prompt spread — the difference between its two nearest contracts — shows that near-term conditions have become less tight. The widely watched metric has narrowed to 53 cents a barrel in backwardation, compared with a differential of more than $1 a barrel a month ago.
At this point, the market may shift toward more bearish sentiment, driven by pessimistic supply-demand fundamentals, given the peak season will be over soon, according to SDIC’s Gao.
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This article was generated from an automated news agency feed without modifications to text.
