Oil prices have been little changed in their recent narrow range as traders continue to monitor the possibility of a supply glut and US efforts to force India to halt purchases of Russian oil.

Brent crude briefly touched below $68 per barrel, after trading between $65 and $70 for most of August. White House trade adviser Peter Navarro increased pressure on New Delhi to halt purchases of Russian oil after Washington doubled import duties from the country to 50%. The US has been squeezing India over its imports of Russian crude as part of its efforts to end the war in Ukraine.

At the same time, Ukraine has stepped up drone attacks on Russian oil infrastructure, hitting two more refineries after a series of recent attacks. Moscow's crude exports plummeted last week, according to tanker tracking data compiled by Bloomberg, after Ukraine intensified its attacks. The oil market is widely expected to be in surplus by year-end, as rising production from the OPEC+ alliance and outside the group outstrips demand. The producer group is scheduled to meet on September 7, but no talks have yet taken place on next steps, according to a senior OPEC delegate.

"Tariffs and sanctions related to Russia, as well as attacks on Russian oil facilities, have kept oil prices resilient in the $60s, despite a looming oversupply that should lower prices," Citigroup analysts including Anthony Yuen said in a note.

Although a surplus is widely expected toward the end of the year, its impact on the market remains uncertain. Bank of America Corp. said Wednesday that the availability of about a billion barrels of spare tanker space means it's possible the additional supply could be absorbed fairly comfortably.

Against this backdrop, there has been some weakness in the Brent market over the past few days, following a series of cargo bids in the key North Sea pricing window. The key swap contract is at its weakest level since May, and the global benchmark is at its weakest level since March compared to the Middle East benchmark Dubai. (alg)

Source: Bloomberg