Brent crude lost more than $4 in August, halting a three-month rally as the US moved to raise tariffs on India and fuel demand showed signs of slowing with the end of the summer driving season.
The global demand outlook brightened in May after US President Donald Trump extended the deadline for reciprocal tariffs on the EU, which contributed to Brent finishing the month at $62.60 a barrel, up 2.6% from April.
In June, Trump's announcement of a trade deal with China spurred consumption from the world's top oil buyer, sending Brent up 6.2% to $66.46.
Prices gained further in July, climbing 7.9% to $71.71 as Washington imposed new sanctions on oil shipments from Iran and Russia, intensifying supply concerns.
However, that trend reversed in August, when the US doubled tariffs on Indian goods to 50% and expectations for weaker consumption took hold. Brent settled the month at $67.37 a barrel, a 6% drop from July, erasing about $4.34 in value.
- Prices may weaken in final months of year
As the final quarter of the year approaches, expectations of a supply glut are weighing on crude prices, Kate Dourian, a non-resident fellow at the Arab Gulf States Institute in Washington, told Anadolu.
"Prices have remained somewhat stable despite increases in OPEC+ production, as the voluntary cuts were unwound a year ahead of schedule," Dourian said.
"If a supply glut emerges in the last few months of the year, we could see weaker prices. Much will depend on whether demand is robust enough to keep the market in balance," she added.
Dourian noted that market dynamics could shift if sanctions on Iran are reinstated or Washington enforces tougher measures on Russia's energy sector, adding that geopolitical and trade uncertainties have continued to fuel price volatility throughout the year.
- Prices likely to decline toward $50
Osama Rizvi, analyst at US-based Primary Vision, said the market could face oversupply in the coming months not only in crude but also in refined products.
Rizvi noted that global refinery runs are at elevated levels, but without sufficient demand, a likely scenario, stockpiles could build up.
"Diesel demand from power generation in Europe may provide some cushion to prices, but much will depend on China's inventory appetite," Rizvi said.
"I expect prices to remain range-bound, with a greater likelihood of falling into the $50s rather than the $70s," he added.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr