Oil Prices Slip as Market Awaits EIA Report
Oil prices fell on Tuesday as traders awaited the latest U.S. Energy Information Administration (EIA) inventory report. Market sentiment was also shaped by expectations of weaker demand with the summer driving season ending in early September.
Brent crude settled at $66.12 a barrel, down $0.51 or 0.77%. U.S. West Texas Intermediate (WTI) closed at $63.17, down $0.79 or 1.24%.
Seasonal Demand Factors in Play
“It really is seasonal factors,” said John Kilduff, partner at Again Capital. He noted that oil prices were not receiving any boost from equity markets, despite a positive U.S. inflation report pointing to a potential interest rate cut.
U.S. consumer prices rose in July, with tariff-driven increases in import costs leading to the strongest gain in six months for a key measure of core inflation.
Kilduff added that diesel demand, which has supported oil consumption, appears to be slowing. Inventory data from the American Petroleum Institute (Tuesday) and the EIA (Wednesday) may confirm signs of weaker demand.
OPEC and EIA Outlooks Show Mixed Trends
Reports from OPEC and the EIA indicated that global oil production is set to rise this year. However, both forecast a decline in U.S. crude output in 2026, even as production in other regions grows.
OPEC’s monthly report raised its 2026 global oil demand forecast by 100,000 barrels per day (bpd) to 1.38 million bpd, while leaving its 2025 estimate unchanged.
The EIA projected U.S. crude output will reach a record 13.41 million bpd in 2025, supported by higher well productivity. But output is expected to fall to 13.28 million bpd in 2026 — the first decline since 2021 — due to lower oil prices.
The EIA also cut its Brent crude price forecast for 2025 to $51 per barrel, down from $58, citing OPEC’s decision to speed up production increases.
Geopolitical Developments in Focus
This week, U.S. President Donald Trump extended the U.S.-China tariff truce to November 10, avoiding steep duties on Chinese imports during the key holiday season for U.S. retailers.
Markets are also watching the upcoming Trump-Putin meeting in Alaska on Friday, aimed at ending the war in Ukraine.
“If Friday’s meeting moves closer to a ceasefire or peace deal, Trump could suspend secondary tariffs on India before they take effect in two weeks,” Commerzbank said in a note. “If not, tougher sanctions could target other buyers of Russian oil, including China.”
