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Oil Prices Fall, Surplus Narrative Dominates
Friday, 19 September 2025 21:10 WIB | OIL |brent oilOil,Crude Oil

Oil prices weakened for a third day, dragged down by expectations of a large global supply surplus next year. Brent traded near $67/barrel in London, with the market assessing that OPEC+ production recovery and rising output from competitors could build inventories, holding prices within a narrow range.

Concerns about supply disruptions from Russia provided limited support. Ukraine's attack on energy infrastructure—including two refineries on Thursday—has pushed Russian processing capacity below 5 million bpd, the lowest since April 2022 (JPMorgan estimates). However, the narrative of a future surplus remains dominant, making any rapid rally easily dampened.

On the policy front, US President Donald Trump continues to clamp down on Russian oil flows, including imposing 50% tariffs on Indian goods to punish Moscow's oil purchases. However, Indian refineries reportedly have no plans to halt Russian imports, so the policy's impact on physical flows remains limited.

In conclusion, the market sees a tug-of-war between price-supportive geopolitical risks and the prospect of a supply glut. As long as global demand hasn't shown any acceleration, oil prices are potentially range-bound, with Russia-Ukraine headlines driving short-term volatility.

Source: Trading Economics.com

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