(Reuters) -Oil prices were little changed on Tuesday after rising in the previous session as concerns supply will exceed demand next year outweighed worries Russian shipments will remain under sanctions as talks to end the Ukraine war remain inconclusive.
Brent futures fell 17 cents, or 0.3%, to $63.20 a barrel as of 0158 GMT. West Texas Intermediate (WTI) crude declined 12 cents, or 0.2%, at $58.71.
Both crude benchmarks gained 1.3% on Monday as rising doubts about a peace deal to end the Russia-Ukraine war reduced expectations for the unfettered flow of Russian crude and fuel supplies, which are under sanctions from Western nations.
Even as market participants worry about Russian shipments, the overall outlook for crude oil supply and demand balances in 2026 is looser amid numerous forecasts supply growth will exceed demand increases next year.
Deutsche Bank sees a 2026 crude oil surplus of at least 2 million barrels per day and no clear path back to deficits even by 2027, the bank said in a note on Monday.
“The path forward into 2026 remains a bearish one,” analyst Michael Hsueh said.
The expectation for softer markets next year is outweighing the lack of a resolution between the U.S. and Ukraine over a U.S. peace proposal that Kyiv and its European allies saw as a Kremlin wish list, which supported prices. A Russia-Ukraine peace deal could lead to sanctions being lifted on Moscow, unleashing previously restricted oil supplies into the market.
Still, oil markets are finding some support from increasing expectations the U.S. will cut interest rates at its December 9 to 10 policy meeting, with Federal Reserve members indicating their support for a cut.
Lower interest rates could stimulate economic growth and strengthen oil demand.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Christian Schmollinger)
Comments