HG MARKETS:

Oil prices edged lower on Wednesday after the International Energy Agency (IEA) forecast that global oil supply would exceed demand in 2025, amid signs of weakening fuel consumption in major economies. The agency raised its supply growth estimates while lowering its outlook for demand, citing slower economic activity and energy efficiency gains.

In contrast, OPEC+ offered a more bullish view in its monthly report released Tuesday. The group increased its global oil demand forecast for next year and slightly reduced supply growth expectations from non-OPEC+ producers, particularly the United States, suggesting a potentially tighter market going forward. Meanwhile, U.S. crude inventories rose by 1.52 million barrels last week, according to data from the American Petroleum Institute. Gasoline stocks declined, while distillate inventories recorded a modest increase, reflecting mixed signals on domestic demand.

Market participants are also closely watching geopolitical developments ahead of Friday’s meeting between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska. The leaders are expected to discuss efforts to end Russia’s ongoing war in Ukraine, which has remained a major source of instability in global oil markets since it began in early 2022.

Volatility in energy markets has intensified in recent months as traders weigh conflicting supply and demand signals against the backdrop of global economic uncertainty and geopolitical tensions. Analysts note that rising supply, particularly from the U.S., Brazil, and Guyana, could put downward pressure on prices if demand continues to lag expectations. At the same time, refining margins have narrowed, especially in Asia and Europe, due to sluggish demand recovery and seasonal shifts in consumption patterns.

The market is also bracing for additional inventory data from the U.S. Energy Information Administration (EIA), due later this week, which could further influence short-term price movements. Investor sentiment remains cautious, with crude futures showing muted trading volumes ahead of the Trump-Putin summit, which could have wide-ranging implications for energy policy and global supply dynamics.