Oil prices declined slightly on Friday as traders reacted to geopolitical developments and signs of a potential oversupply in global markets.
Brent crude futures dipped 8 cents to $60.98 a barrel, while U.S. West Texas Intermediate (WTI) slipped 9 cents to $57.37.
Both benchmarks were on track for a weekly loss of about 3%.
Markets React to Surprise Trump-Putin Meeting
The downturn followed the unexpected announcement that U.S. President Donald Trump and Russian President Vladimir Putin will meet in Budapest within two weeks to discuss ending the war in Ukraine.
The summit plan reportedly came amid renewed Russian concerns over additional U.S. military support for Kyiv.
Ukrainian officials, including President Volodymyr Zelenskyy, were in Washington on Friday to seek more aid, including U.S.-made Tomahawk missiles.
“Concerns of tighter supplies were eased after it was announced that Trump would be meeting with Putin to discuss ending the war in Ukraine,” said Daniel Hynes, an analyst at ANZ.
Oversupply Concerns Add Pressure
Adding to the bearish mood, the International Energy Agency (IEA) warned this week that global oil markets could face a supply glut by 2026.
The agency cited surging production in the U.S. and steady output from OPEC members as key factors.
On Thursday, the U.S. Energy Information Administration reported a surprise inventory build of 3.5 million barrels, bringing total crude stocks to 423.8 million.
Analysts had expected an increase of only 288,000 barrels.
The rise came as several U.S. refineries entered seasonal maintenance shutdowns, lowering utilization rates.
U.S. Output Hits Record Levels
The EIA data also showed U.S. crude production climbed to an all-time high of 13.636 million barrels per day.
This record level further dampened price sentiment, reinforcing expectations that supply will outpace demand through year-end.
In the previous session, Brent fell 1.37% and WTI dropped 1.39%, both hitting their lowest levels since early May.
With geopolitical uncertainty and strong supply fundamentals, analysts suggest oil markets may remain volatile as traders await developments from the upcoming Trump-Putin summit.