Oil prices continued to move lower yesterday, with the market focused on Friday’s Trump-Putin meeting. The outcome could remove some of the sanction risk hanging over the market. The drop in oil comes despite US consumer price index data yesterday buttressing the view that the Federal Reserve will likely cut interest rates at its September meeting, ING's FX analyst Francesco Pesole notes.

No changes in OPEC's monthly oil report

"In its monthly oil market report, OPEC made no changes to its 2025 demand and non-OPEC+ supply numbers. The group did, however, make some revisions to its 2026 forecasts. OPEC increased its oil demand growth forecasts for 2026 by 100k b/d to 1.38m b/d, while non-OPEC+ supply growth was cut by 100k b/d to 630k b/d. This leaves the market tighter than previously forecast. The release also shows that OPEC increased supply by 263k b/d month on month in July to 27.54m b/d. Saudi Arabia and the UAE drove most of the increase. The International Energy Agency (IEA) will release its monthly oil market report later today."

"The Energy Information Administration (EIA), in its latest Short-Term Energy Outlook, slightly increased its US crude oil production estimate for 2025 from 13.37m b/d to 13.41m b/d. This leaves year-on-year supply growth at 200k b/d. However, the agency now expects US oil production will fall in 2026 by 130k b/d YoY to 13.28m b/d. Downside risks to supply aren’t too surprising, given the significant decline in US drilling activity in recent months. For dry natural gas output, the EIA expects supply in 2025 to grow by 3.2 bcf/day to 106.4 bcf/day, while 2026 natural gas output is expected to fall by 0.3 bcf/day YoY."

"Finally, American Petroleum Institute (API) inventory numbers were fairly neutral overnight. US crude oil inventories increased by 1.5m barrels over the last week. For refined products, gasoline stocks fell by 1.8m barrels, while distillate inventories increased by 300k barrels. The more widely followed EIA weekly inventory report will be released later today."