Die-Hard Bears Drag Oil To 3% Weekly Loss On Glut Fears And Easing Of Political Tensions

Meanwhile, India refutes claims it has begun reducing oil imports from Russia: File Image/Pixabay

Oil on Friday continued its downward trajectory and was unsurprisingly on track for a weekly loss of nearly 3 percent based largely on the lingering effects of a global supply glut warning – even though analysts in the previous session doubted the severity of the forecast.

Brent was down nine cents at $60.97 per barrel at 1311 GMT, while West Texas Intermediate was down 4 cents at $57.42.

Earlier in the week, the International Energy Agency warned that the global oil market could incur a far bigger than previously thought surplus: on the order of up to 4 million barrels per day (bpd).

However, in the previous session Giovanni Staunovo, commodity analyst at UBS, questioned the figures, stating that oil's price drop this week would have been steeper if traders had taken the IEA's estimate seriously: "Either the market is pricing it completely wrongly or the [estimated] surplus is too elevated…I will believe it is a bit on the elevated side."

On Friday, Tanas Varga, analyst at PVM, said of U.S. president Donald Trump and Russian president Vladimir Putin agreeing to meet in two weeks to discuss Ukraine, "It could be a sign that the U.S.'s stance on Russia may ease; if so, that should push prices lower."

Eric Lee, senior commodities strategist at Citigroup, agreed, saying that easing of geopolitical tensions could "precipitate a faster move" toward $50 oil.

Traders intent on being swayed only by bearish sentiment also had to contend with the rising trade tensions between the U.S. and China, and Jorge Montepeque, managing director at Onyx Capital Group, remarked, "It just demolishes confidence."

But in this case too, totally ignored was U.S. treasury secretary Scott Bessent on Wednesday stating that Washington does not want the conflict to escalate and stressed that Trump is ready to meet Chinese president Xi Jinping in South Korea later this month.

Capping the gloom on Friday were Indian industry sources, who told media that despite Washington earlier stating that India's refiners are halving crude oil imports from Russia, the government hasn't requested them to cut imports and no cuts have been seen for loadings in November.