Oil falls as IEA raises supply forecast, investors await US-Russia meeting
Brent crude futures fell 41 cents, or 0.6%, to $65.71 a barrel by 1037 GMT, while U.S. West Texas Intermediate crude futures edged down 50 cents, or 0.8% to $62.67.
Both contracts settled lower on Tuesday.
"The API oil inventory report last night together with a dovish oil market outlook from the IEA today weighed on prices," said UBS commodity analyst Giovanni Staunovo.
The International Energy Agency on Wednesday raised its forecast for oil supply growth this year but lowered its demand forecast due to lacklustre fuel demand across the major economies.
Meanwhile, in its monthly report on Tuesday OPEC+ raised its global oil demand forecast for next year and trimmed estimates of supply growth from the United States and other producers outside the wider group, pointing to a tighter market.
"Were we to take an aggregate of the respective IEA and OPEC oil demand growth projections for 2025 at their respective bearish and bullish ends, even a modest middle figure say just north of 1 million bpd can easily be serviced by non-OPEC supply growth alone at the moment," said independent energy analyst Gaurav Sharma.
"So, I don't see a bullish case for oil over the near-term horizon."
Meanwhile, crude inventories in the United States, the world's biggest oil consumer, rose by 1.52 million barrels last week, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories dropped while distillate inventories gained slightly.
Analysts polled by Reuters expect today's Energy Information Administration report to show crude inventories fell by about 300,000 barrels last week.
Trump and Putin are due to meet in Alaska on Friday to discuss ending Russia's war in Ukraine, which has shaken oil markets since February 2022.
"It's difficult to see what comes out of the meeting on Friday, particularly if the Europeans are not present in Alaska," Staunovo added.
While Trump's administration has tried to temper expectations for major progress toward a ceasefire, calling the summit a "listening exercise", Ukraine and most European countries have said a lasting peace cannot be secured without Ukraine at the negotiating table.
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