Oil Prices Head for First Monthly Loss Since April Amid Increasing Supply

SadaNews Economy - Oil prices have declined, heading towards a monthly loss in August, amid dominating fears of an oversupply in the global market, along with rising geopolitical tensions, primarily concerning U.S. efforts to end the war in Ukraine.

Brent crude for November delivery traded near $68 a barrel, having lost about 5% of its value during the month, while West Texas Intermediate crude fell towards $64.

This decline is driven by investors' concerns that global supplies will exceed demand levels in the coming quarters, which could lead to a resurgence in oil inventories.

On the political side, attention is focused on developments in the Ukrainian file and the potential redirection of Russian crude exports, as White House spokeswoman Caroline Levitt stated that U.S. President Donald Trump might issue a statement regarding Ukraine later.

Washington had imposed a 50% tariff this week on most Indian imports, in a punitive measure in response to New Delhi's continued purchases of Russian crude, despite Western pressures.

A Deadline from Trump to Avoid "Very Significant Sanctions"

German Chancellor Friedrich Merz ruled out any imminent meeting between Ukrainian President Volodymyr Zelensky and his Russian counterpart Vladimir Putin, as U.S. President Donald Trump intensified his rhetoric, threatening "very significant consequences" if Moscow refused to sit at the negotiation table, hinting at a two-week deadline for direct bilateral talks.

These remarks come as oil continues its decline, recording its first monthly loss since last April, the month in which most commodities were affected by the escalation of the trade war led by Washington, along with fears of slowing energy consumption.

Warnings of a record oversupply in the global market are increasing, according to forecasts from the International Energy Agency, coinciding with the OPEC+ alliance's efforts to regain its full production capacity and boost its market share.

Gao Mingyu, a senior energy analyst at SDIC Essence Futures, stated: "Prices remain in a tight range, as the market continues to deal with expectations for a more flexible balance after the summer demand peak and short-term geopolitical risks. In the absence of a clear escalation in sanctions, the chances for a rise remain limited."