Oil set for weekly drop with focus on supply, US-China tensions

Oil headed for a third weekly decline as investors focused on oversupply and the fallout from renewed US-China trade tensions.

Brent was near $61 a barrel — on track for a 2.8% weekly drop — while West Texas Intermediate traded above $57. US President Donald Trump said he would hold a second meeting with Russian counterpart Vladimir Putin “within two weeks or so” aimed at ending the war in Ukraine, raising the prospect that an increase of barrels from the OPEC+ member will exacerbate a global glut.

Oil is set to notch its longest weekly losing streak since March, as investors look to rising trade tensions between China and the US that could hurt global economic growth and energy demand in the two biggest crude consumers. Meanwhile, forecasts for a glut have become more prominent after the International Energy Agency earlier this week raised its estimate of global oversupply next year by almost a fifth.

Western nations are turning the screws on Russia’s energy sector in a bid to curb the flow of petrodollars to the Kremlin and limit Putin’s ability to finance the war. India’s oil refiners said they expect to reduce — not stop — the purchase of Russian crude following remarks by Trump that the South Asian nation would halt all buying, but are waiting for clarification from the government in New Delhi.

A US government report, meanwhile, showed US crude inventories swelled for a third week to the highest since early September. Still, inventories at Cushing, Oklahoma, the delivery point for WTI, fell to the lowest since July.

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