Crude Oil Falls As Upcoming Trump-Putin Meeting Draws Focus

(RTTNews) - Crude oil has edged lower on Monday as attention turns to the upcoming meeting between the presidents of the United States and Russia in Hungary in a few weeks to end the Russia-Ukraine war even while traders assess recent IEA reports of an oil market surplus in 2026.

WTI Crude Oil for November delivery was last seen trading down by $0.10 (or 0.17%) at $57.44 per barrel.

In the ongoing Russia-Ukraine war, Ukrainian drones struck the giant Orenburg gas processing plant in southern Russia, sparking a fire and forcing it to suspend its intake of gas from Kazakhstan. The plant is run by Russia's state-owned Gazprom.

A separate Ukrainian drone strike hit Russia's Novokuybyshevsk oil refinery in the Samara region near Orenburg, sparking a blaze and damaging its main refining units.

Russian forces attacked a coalmine in Ukraine's Dnipropetrovsk region and an energy site in the Chernihiv region.

The first phase of the Trump-proposed Gaza Peace Plan has so far been largely effective even though there were sporadic attacks by Israeli Defense Forces targeting Hamas in Palestine as both sides accused each other of violating the truce. Now, Israel has re-confirmed the renewal of the ceasefire and Hamas also assured its commitment to peace.

The next phase of the plan requires Hamas to disarm themselves and surrender or exit Palestine, which is expected happen in the coming days for permanent peace in the region.

Buoyed by his success in restoring peace in the Middle East, U.S. President Donald Trump is attempting to end the Russia-Ukraine conflict.

In this regard, Trump and Russian President Vladimir Putin are set to meet in Budapest, Hungary in the coming weeks to discuss means to end the three-plus-year war. Ukraine President Volodymyr Zelenskyy has stated that he would be open to participate if invited, though the U.S. has not responded so far.

After switching support back and forth for Russia and Ukraine, Trump has now stated that Ukraine should cede the territories Russia has captured and settle for peace, a condition which Ukraine is unlikely to accommodate.

Meanwhile, the European Union is planning to adopt its 19th package of sanctions against Russia in their meeting in Luxembourg today.

Any peace plan, if successful, could help more Russian oil flow into the markets and this development is limiting oil's gains.

On the supply side, recent data from the U.S. Energy Information Administration revealed that crude inventories in the U.S. rose by 3.5 million barrels to 423.8 million barrels, far exceeding expectations. The hike was attributed to lower refinery utilization.

U.S. production also climbed to a record high of 13.636 million barrels per day. However, gasoline inventories declined by 267,000 barrels, and distillate inventories dropped by a significant 4.5 million barrels, reflecting tighter product supply.

Crude inventories at Cushing, Oklahoma, decreased by 703,000 barrels, and the net U.S. crude imports fell sharply by 1.75 million barrels per day.

The International Energy Agency on Tuesday trimmed its forecast for world demand growth this year to 710,000 bpd, down 30,000 bpd from the previous forecast.

On the other hand, OPEC maintained its oil demand growth forecast for 2025-2026 and expects demand to rise by 1.3 million bpd this year and at an accelerated rate next year.

The uncertainty about global demand also weighed on markets.

In the confrontation between the U.S. and China over China's curb on its rare earth mineral exports to the U.S., Trump softened his stance last week. Acknowledging that high tariffs on China are unsustainable in the long-term, Trump admitted China is paying "a tremendous amount of money" in tariffs (cumulatively around 157%) to the U.S. and stated that he may consider lowering them if China makes a few concessions.

Trump has confirmed he will be meeting the Chinese President Xi Jinping later this month in South Korea.

Positive signals of the world's two largest crude consumers coming closer is being watched closely by traders.

The U.S. government shutdown has entered day number 20.

In an interview with CNBC, White House economic advisor Kevin Hassett said, "I think the Schumer shutdown is likely to end sometime this week." However, investors are reading his statements with cautious optimism.

As the closure rolls over into the third week, even in the absence of official key economic indicators, based on the recent jobs data and taking cues from the U.S. Federal Reserve Chair Jerome Powell's latest remarks, markets are expecting the U.S. Federal Reserve will be cutting rates at its October 28-29 meeting

The Fed's decision next week will have an impact on the U.S. dollar and consequently oil prices, as oil is a dollar-denominated commodity.