Oil Prices Dip Ahead of U.S. Energy Outlook After OPEC’s Bullish Demand Forecast
Global oil prices retreated on Tuesday as traders awaited the U.S. government’s short-term energy outlook, following OPEC’s bullish assessment of global demand and supply.
Brent crude fell by 20 cents (0.3%) to $66.43 per barrel Tuesday morning, while U.S. West Texas Intermediate dropped 39 cents (0.61%) to $63.51.
“We’re still locked into a range, waiting for an Energy Information Administration report this morning,” said Phil Flynn, senior analyst at Price Futures Group, noting that traders were watching for alignment with OPEC’s earlier forecast.
In its monthly report, OPEC increased its 2026 oil demand forecast by 100,000 bpd to 1.38 million bpd growth and maintained its 2025 outlook. It also projected slower supply growth from the U.S. and other non-OPEC+ producers, indicating a tighter market.
Market sentiment was further shaped by U.S.-China trade talks after President Donald Trump extended a tariff truce to November 10, avoiding new triple-digit tariffs during the holiday retail season. Optimism rose for a potential trade deal that could avert broader economic strain and protect oil demand.
U.S. inflation data showed consumer prices rising in July, partly due to tariffs pushing up import costs, the largest such increase in six months.
On the geopolitical front, Trump and Russian President Vladimir Putin are scheduled to meet in Alaska on Friday to discuss ending the war in Ukraine. Washington has warned of secondary sanctions on buyers of Russian oil if no peace agreement is reached.
“If Friday’s meeting brings a ceasefire or even a peace deal in Ukraine closer, Trump could suspend the secondary tariffs imposed on India last week before they come into force in two weeks,” Reuters quoted Commerzbank. “If not, we could see tougher sanctions against other buyers of Russian oil, like China.”
