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Oil Heads for Monthly Loss as Glut Concern, Geopolitics Dominate

(Bloomberg) -- Oil edged lower to head for a monthly loss, with trading dominated by concerns about a looming glut and geopolitical tensions, including US-led efforts to end the war in Ukraine.

Brent for November delivery traded near $68 a barrel, with the global benchmark about 5% lower this month. West Texas Intermediate fell toward $64. Oil has lost ground in August on worries that global supplies will run ahead of demand in the coming quarters, boosting stockpiles.

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Investors are also focused on Ukraine, and potential shifts in crude flows from Russia. US President Donald Trump was “not happy” about Russia’s recent strikes on Ukraine, White House Press Secretary Karoline Leavitt said. Washington imposed a 50% levy on most Indian imports earlier this week to punish the South Asian nation for buying Russian crude.

Moscow unleashed a wave of drone and missile strikes on Kyiv, in defiance of US calls for an end to the fighting, killing 18 people, Ukrainian authorities said.

A meeting between Ukrainian President Volodymyr Zelenskiy and Russia’s Vladimir Putin was unlikely, according to German Chancellor Friedrich Merz. Trump has threatened “very big consequences” if Moscow doesn’t come to the negotiating table and floated a two-week deadline for bilateral talks.

Oil’s decline in August is the first monthly drop since April, when most commodities were hurt by a sharp escalation in Trump’s trade war and concerns that energy consumption would suffer. The worries about a surplus — with the International Energy Agency forecasting a record glut — follow a campaign by OPEC+ to restore idled capacity and reclaim market share.

“Prices remain range-bound as the market navigates a looser balance outlook following the summer peak season and the short-term geopolitical risk,” said Gao Mingyu, chief energy analyst at SDIC Essence Futures Co. “Without a clear escalation in sanction measures, the upside potential is limited.”