Crude Oil Soars As Trump-Putin Meeting Falls Through

(RTTNews) - Crude oil surged on Wednesday, extending yesterday's gains, as the proposed U.S.-Russia summit to discuss the Russia-Ukraine war is not expected to take place any time soon.

WTI Crude Oil for December delivery was last seen trading up by $1.28 (or 2.24%) at $58.52 per barrel.

In a sudden reversal, the planned meeting between U.S. President Donald Trump and Russian President Vladimir Putin slated to be held in Budapest, Hungary, to explore avenues to end the three-plus-year Russia-Ukraine war has been cancelled.

Without elaborating, Trump merely stated that he did not want to waste his time and added that he will wait to see what happens.

Reportedly, the Russian side had emphasized that it was not interested in a ceasefire that will lead to nothing. As a result, a dispirited Trump declined to go ahead with the preparations.

As it stands now, there is no chance of abatement of the conflict and concerns over supply-side disruptions persist due to heavy sanctions by the U.S. and West on Russian oil exports.

European Union nations supporting Ukraine are planning to monetize frozen Russian assets in the EU to aid Ukraine in the war as U.S. aid is drying up.

Yesterday, in a significant development, the U.S. Department of Energy announced that in an effort to strengthen energy security, it is planning to buy around 1 million barrels of crude oil to add to its Strategic Petroleum Reserve (SPR) stockpile, making use of the current low prices.

The reserve has a capacity to hold around 700 million barrels and is now storing around 410 million barrels. In the near-term, this move by the DoE could tighten supplies.

Data released by the U.S. Energy Information Administration today revealed that crude oil inventories dipped by 0.961 million barrels in the week ending October 17 and gasoline inventories fell by 2.147 million barrels. Distillate fuel inventories also decreases by 1.479 million barrels.

For the same time period, crude inventories at the Cushing, Oklahoma, delivery hub fell by 770,000 barrels.

Reportedly, the U.S. is closing to reach a trade deal with India whereby the U.S. could slash tariffs to around 15% from the current 50%. In August, Trump levied an additional 25% as "penalty tariffs" on India for its Russian oil purchases, taking India's cumulative tariffs to 50%.

There is no official confirmation from India on Trump's claims that India has agreed to stop purchasing crude oil from Russia.

For months, the Paris-based International Energy Agency has warned of a severe supply glut in 2026 due to a ramp-up in production from the OPEC+ alliance.

For 2025, the IEA trimmed its global oil demand forecast by 0.1 million barrels per day to 103.8 million barrels per day.

Contrasting the IEA, OPEC analysts are forecasting a reasonably balanced supply and demand outlook for this year and the next.

In Kuwait today, OPEC Secretary-General Haitham Al-Ghais stated that global demand for oil is expected to reach around 123 million barrels per day by 2050.

On the inventory front, data released by American Petroleum Institute revealed that for the week ending October 17, the U.S. crude oil inventories dropped by 2.98 million barrels following a 3.52 million-barrel build in the previous week. This is the first drop after two straight weeks of strong builds.

In the Middle East, phase one of the Trump-proposed Gaza Peace Plan has worked out well so far with no remarkable adverse drift in its execution. A permanent peace in the gulf ensures smooth transit of oil and energy trade.

In the U.S., the shutdown entered day number 22 today.

Even in the absence of key economic data, markets are pricing in a rate cut by the U.S. Federal Reserve at its upcoming October 28-29 meeting based on private data showing a lack of hiring in the U.S.

Lower borrowing costs boost demand for oil and push prices higher.