Oil edges lower on Trump-Putin meeting plans and rising US output

WASHINGTON: Oil prices drifted lower in early Friday trading, with both benchmarks on track for weekly losses as traders balanced growing supply signals with new political moves that could influence global energy markets.

By 0030 GMT, Brent crude was down 8 cents at $60.98 a barrel, while US West Texas Intermediate (WTI) slipped 9 cents to $57.37. Both contracts have fallen nearly 3 percent this week amid renewed worries of an oversupplied market, following the International Energy Agency’s latest projection of a supply glut by 2026.

Geopolitical tensions ease slightly

The market reaction came after US President Donald Trump and Russian President Vladimir Putin agreed to meet in Hungary to discuss ending the war in Ukraine. The meeting, expected within two weeks in Budapest, took analysts by surprise as tensions between Moscow and Washington had been rising over potential new US military support for Kyiv.

Trump’s diplomatic move eased fears of tighter oil supplies that had supported prices earlier in the week. “Concerns of tighter supplies were eased after it was announced that Trump would be meeting with Putin to discuss ending the war in Ukraine,” Daniel Hynes, an analyst at ANZ, noted in a report.

The announcement followed reports that Ukrainian officials were headed to Washington to push for more weapons, including long-range Tomahawk missiles. Meanwhile, the US continued pressing India and China to reduce their purchases of Russian oil, a move aimed at curbing Moscow’s revenue streams.

Rising US inventories weigh on market

Adding to downward pressure, data from the Energy Information Administration showed a sharp rise in US crude inventories. Stocks increased by 3.5 million barrels to 423.8 million last week, far exceeding analysts’ expectations for a modest 288,000-barrel build.

The larger-than-expected rise was attributed to lower refining activity as plants entered seasonal maintenance turnarounds. The data also revealed US crude output climbed to a record 13.636 million barrels per day, underlining the strength of domestic production.

On Thursday, Brent settled 1.37 percent lower and WTI dropped 1.39 percent, marking their weakest close since May 5.

Analysts said that while hopes of progress in Ukraine could bring some relief to markets, the overall sentiment remains cautious. The combination of swelling inventories, robust US output, and questions over future demand is keeping traders wary.