Oil Prices Set to Record Biggest Weekly Loss Since June

SadaNews - Oil prices are on track to record their largest weekly loss since June, as traders assess that U.S. efforts to end the war in Ukraine will not impact supplies, even as Washington imposes sanctions on India for importing crude oil from Moscow.

Brent crude traded near $66 a barrel, down about 5% this week, while West Texas Intermediate crude fell below $64.

U.S. President Donald Trump, who set a deadline for Moscow to agree to a ceasefire by Friday, stated that he is ready to meet with his Russian counterpart Vladimir Putin, even if the latter does not agree to meet with Ukrainian President Volodymyr Zelensky as well.

Sanctioning India for Buying Russian Oil

Earlier this week, Trump doubled tariffs on all Indian imports to 50% as a penalty for the country buying Russian crude oil, prompting local state-owned refineries to backtrack on purchases and seek alternative sources.

Treasury Secretary Scott Pisent also mentioned that the U.S. might impose tariffs on China at some point when asked about targeting countries that purchase energy from Moscow.

Oil prices fell in August after three months of gains. Investors are bracing for the potential of oversupply later this year, as the OPEC+ alliance agreed to ease supply restrictions.

Trump's Policies Pressuring the U.S. Economy

At the same time, crude futures were affected by signs of slowing growth in the world's largest economy, as the broader trade tariffs imposed by Trump impacted economic activity, posing a risk to energy demand.

Gao Mingyou, senior energy analyst at SDIC Essence Futures, stated, "Positive signals from U.S.-Russia talks this week and plans for a direct meeting between Trump and Putin have alleviated concerns about disruptions in Russian supplies, leading to a significant reduction in geopolitical risk premiums."

She added that the market might shift towards a more pessimistic sentiment, driven by negative supply and demand fundamentals, as the peak season comes to an end.

The price spread for Brent crude, which is the difference between the nearest two contracts, indicates that near-term market conditions have become less severe. This widely monitored indicator has shrunk to 53 cents per barrel in backwardation, compared to more than a dollar per barrel a month ago.