Oil prices managed to settle higher yesterday, with Brent closing 0.51% up on the day. However, the scale of the surplus facing the market suggests that any upside is likely limited. We continue to expect Oil prices to trend lower in the months ahead, ING's commodity experts Ewa Manthey and Warren Patterson note.

Cancellation of the Trump-Putin summit erodes hopes for a peace deal

"Trump’s trade negotiation comments are likely providing some support to the market. Further support is likely coming from the cancellation of the Trump-Putin summit, which erodes hopes for a Russia-Ukraine peace deal."

"US inventory numbers from the American Petroleum Institute were also supportive, with US crude Oil inventories falling by 3m barrels, while Cushing crude stocks fell by 400k barrels. Refined products inventories saw declines, with gasoline and distillate stocks falling by 200k barrels and 1m barrels, respectively."

"The US administration is looking to take advantage of lower Oil prices to refill its strategic petroleum reserve (SPR). The Department of Energy yesterday announced plans to buy 1m barrels of crude Oil for delivery in December and January. The US SPR stands at 408m barrels, up from the low of 347m barrels in 2023, but still well below the 656m barrels held in 2020."