Brent holds at two-month lows

Brent crude futures hovered near $66 a barrel on Wednesday, staying close to a two-month low as signs of weakening demand and upcoming geopolitical events kept investors cautious.

U.S. API data showed crude inventories rose by 1.52 million barrels last week, suggesting that the summer driving season’s demand peak may be drawing to a close. Gasoline stocks fell modestly, while distillate inventories edged higher, reinforcing the view that fuel consumption growth is tapering off heading into late summer.

Geopolitical uncertainty also weighed on sentiment ahead of U.S.–Russia talks aimed at addressing the war in Ukraine. President Donald Trump played down the likelihood of a breakthrough, while Ukrainian President Volodymyr Zelenskyy reiterated that Kyiv would not accept territorial concessions, dampening hopes for any immediate resolution that could ease supply risks from the region.

From a supply perspective, the U.S. Energy Information Administration (EIA) expects domestic crude production to peak at a record 13.41 million barrels per day in 2025 before declining in 2026 as lower prices begin to curb drilling and investment activity.

Meanwhile, OPEC kept its 2025 oil demand forecast unchanged but raised its 2026 growth projection by 100,000 bpd to 1.38 million, citing anticipated demand gains in Asia, Africa, and the Middle East as U.S. output begins to ease.

Adding to the bearish tone, the U.S. Department of Energy increased its estimate for this year’s global oil surplus to 1.7 million bpd, reflecting both higher-than-expected non-OPEC supply growth and more subdued demand trends. This growing surplus, combined with signs of a softer global economic outlook, is fueling concerns that Brent prices could remain under pressure in the near term unless there is a significant geopolitical disruption or deeper production cuts from major producers.