September WTI crude oil (CLU25) is down -0.71 (-1.11%), and September RBOB gasoline (RBU25) is down -0.0244 (-1.16%).

Crude oil prices are on the defensive ahead of today's Trump-Putin summit, which will reportedly begin at around 3 pm ET, according to Reuters, after the US oil futures market officially closes.  

President Trump has said he will proceed with high tariffs on countries that buy Russian oil if President Putin does not agree to a ceasefire, which would further reduce Russian oil exports and tighten the global oil market.  Mr. Trump has sounded progressively more hawkish this week about today's summit.  On the other hand, if there is progress at today's summit, then Mr. Trump may refrain from new tariffs or sanctions and may even reduce sanctions on Russian oil.

Oil prices showed weakness earlier this week due to bearish oil surplus outlooks issued by the EIA and IEA.  The International Energy Agency (IEA) on Wednesday released a report forecasting a record global oil surplus of 2.96 million bpd in 2026 due to tepid demand and increased supply.  For its part, the US EIA on Tuesday raised its forecast for the 2025 global oil surplus to 1.7 million bpd from 1.1 million bpd.  The EIA expects a global oil surplus of 1.5 million bpd in 2026, up from its previous forecast of 1.1 million bpd.

In a bullish longer-term factor, the EIA on Tuesday forecasted that US oil production in 2026 will fall to 13.28 million bpd, which would be the first annual drop since 2021.  US shale companies are reducing their drilling and production plans due to low crude oil prices.  The number of active US oil rigs recently fell to a 3.75-year low of 410 rigs.

Concern about higher OPEC production is weighing on crude prices after OPEC+ on August 2 endorsed an additional 547,000 bpd increase in its crude production for September 1.  OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026.  OPEC+ has 1.66 million bpd of supplies that are currently due to remain offline until late 2026.  OPEC July crude production fell -20,000 bpd to 28.31 million bpd.

A decline in crude oil held worldwide on tankers is bullish for oil prices.  Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -5% w/w to 80.52 million bbl in the week ended August 8.

Wednesday's weekly EIA report showed that US crude oil inventories rose +3.04 million bbls to a 2-month high in the week ended August 8.  The weekly EIA report showed that (1) US crude oil inventories as of August 8 were -5.1% below the seasonal 5-year average, (2) gasoline inventories were +0.25% above the seasonal 5-year average, and (3) distillate inventories were -15.45% below the 5-year seasonal average.  US crude oil production in the week ending August 8 rose by +0.3% y/y to 13.327 million bpd, modestly below the record high of 13.631 million bpd posted in the week of 12/6/2024.

Baker Hughes reported last Friday that the number of active US oil rigs in the week ending August 8 rose by +1 rig to 411 rigs, just above the 3.75-year low of 410 rigs from August 1.  Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.25-year high of 627 rigs reported in December 2022.