Oil prices fell about 2% on Thursday, slipping to a two-week low as oversupply fears and softening demand indicators outweighed geopolitical risks from the Middle East and Ukraine.
Brent crude settled at $66.37, down $1.12 (−1.7%), while U.S. West Texas Intermediate (WTI) closed at $62.37, off $1.30 (−2.0%).
The IEA’s monthly report signaled global supply growth will outpace expectations this year as OPEC+ continues to raise output, warning of “massive oversupply” into 2026. While OPEC’s own report kept demand forecasts steady, traders read the divergence as a bearish cue. “Today’s headlines point to oversupply overwhelming any perceived shortages from conflict,” said Carsten Fritsch at Commerzbank.
Saudi Arabia is set to boost October exports to China to 1.65 million bpd, up from 1.43 million in September, according to trade sources, adding weight to supply concerns. UBS’s Giovanni Staunovo noted that markets are now questioning how long China can continue absorbing extra barrels without straining OECD inventories.
Meanwhile, Russian oil revenues fell in August to one of their lowest levels since the war began, the IEA reported. Western officials, including U.S. Energy Secretary Chris Wright and EU Commissioner Dan Jorgensen, discussed ways to further curb Russia’s trade, while India’s Adani Group banned tankers sanctioned by Western nations from its ports — potentially constraining Russian crude flows into India.
Macro signals were mixed. U.S. CPI rose at its fastest pace in seven months in August, but higher jobless claims reinforced expectations the Fed will cut rates at its September 17 meeting. In Europe, the ECB held rates steady but left traders split over whether another cut is likely this cycle.
Overall, the market remains torn between geopolitical flashpoints that could tighten supplies and a structural oversupply outlook that is starting to dominate sentiment.