Oil is teetering on a third week of declines, weighed down by signs the market is reaching the surplus analysts have been waiting for. West Texas Intermediate is trading near $57 a barrel, expected to fall about 3% this week in its longest decline since March.

Oversupply news continued to emerge this week. The International Energy Agency (IEA) raised its forecast for a global oversupply next year by about 18%. And a US storage broker reported a surge in bids to secure tanker capacity at the country's main crude hub in Cushing, Oklahoma, underscoring that traders are preparing for a supply glut. Prices for US crude have also weakened.

Crude traders are also tracking the volatile tensions between Washington and Beijing. President Donald Trump said Friday that higher tariffs on China are not "sustainable," after last week threatening an additional 100% tariff on Beijing's goods. This shift in sentiment eased some concerns that the ongoing feud between the two largest crude oil consumers could cripple energy consumption, but investors remained wary of further escalation.

Meanwhile, Trump said he would hold a second meeting with his Russian counterpart, Vladimir Putin, "in about two weeks" aimed at ending the war in Ukraine, raising the possibility of more crude oil supplies from the region.

"Crude oil is weighing Trump's meeting with Putin against the backdrop of mounting evidence of oversupply," said Joe DeLaura, global energy strategist at Rabobank. "With the oil market in contango from the second quarter of next year onward, the path forward is downward for crude unless demand surprises to the upside, which we view as unlikely."

Western nations are pressuring Russia's energy sector in an effort to curb the flow of petrodollars to the Kremlin and limit Putin's ability to finance wars. Indian refiners said they expect to reduce—not stop—purchases of Russian crude following Trump's statement that the South Asian nation would halt all purchases.

WTI for November delivery was little changed at $57.50 a barrel at 12:00 p.m. in New York. Brent for December settlement traded at $61.14 a barrel.(alg)

Source: Bloomberg