FX.co ★ Oil Falls on Supply Glut, Demand Concerns

West Texas Intermediate (WTI) crude oil futures declined to $63.8 per barrel on Monday, continuing the downward trend from the prior session. This drop comes amidst concerns over a potential oversupply and diminishing demand prospects. All eyes are on the upcoming OPEC+ meeting this week, as the group's accelerated plans to increase output are expected to enhance the global supply outlook. Yet, these additional supplies have not fully reached the United States, the largest fuel consumer globally, where the conclusion of the summer driving season has already dampened demand forecasts. Such concerns are counteracting the geopolitical risk premium associated with the ongoing conflict between Russia and Ukraine, as well as the possibility of stricter U.S. sanctions that may restrict global oil flows. Additionally, market participants are evaluating whether India will comply with U.S. pressure to halt oil purchases from Russia, following Washington's imposition of secondary sanctions on New Delhi last week. Furthermore, the impending Shanghai Cooperation Organization (SCO) summit is drawing attention, with Chinese President Xi Jinping, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi all anticipated to be in attendance.