WTI Crude Oil range-bound as peace talks ease risks but supply concerns linger

• WTI Crude Oil trades slightly higher on Tuesday near $62.50, holding within last week's $62-$63 range.
• Optimism over Russia-Ukraine peace talks eases some geopolitical risk premium.
• Macro forecasts from the EIA and IEA warn of a possible supply glut as output outpaces demand.

West Texas Intermediate (WTI) Crude Oil is trading with a slightly firmer tone on Tuesday, trading near $62.40 per barrel, as traders reacted to signs of progress in peace talks between Russia and Ukraine.

Oil remains nestled within last week's firmly established $62-$63 trading band, showing the market's uncertainty. While hopes for an end to the war reduced some geopolitical tension, a peace deal could also bring more Russian Oil back to the market, putting downward pressure on prices.

Meanwhile, investors are also digesting fresh macroeconomic signals that highlight growing downside risks for Oil demand. Recent projections from global energy agencies suggest that rising output from major producers, including OPEC+ and US shale operators, may continue to outpace consumption, especially if growth in key economies slows further.

The broader market tone remains cautious, with the US Energy Information Administration (EIA) flagging rising crude inventories and a potential oversupply scenario in its latest outlook. At the same time, the International Energy Agency (IEA) has shifted focus back to more conservative demand forecasts based on current policy trajectories, reinforcing concerns of a longer-term imbalance.

Crude Oil came under significant pressure earlier this month after US President Donald Trump announced plans to impose an additional 25% tariff on Russian oil imports, escalating trade tensions and injecting fresh volatility into energy markets. Trump also signaled that similar tariff measures could be extended to China, amplifying fears of a broader disruption to global Oil flows. The announcement triggered a sharp sell-off in Oil futures, with WTI down nearly 10% month-to-date, as traders reassessed the demand outlook amid rising geopolitical and trade-related headwinds.

As the proposed tariffs near their end-of-month implementation, market participants are already adjusting strategies. According to The Times of India, several Indian refiners have delayed purchasing September-loading Russian crude amid uncertainty over pricing and trade logistics.

In contrast, CNN reported that Chinese refiners are moving swiftly to lock in supply. Muyu Xu, senior crude oil analyst at commodities tracker Kpler, noted that state-owned and private Chinese refiners have already booked 13 cargoes for October and two more for November. "This is an opportunistic move," Xu told CNN. "Russian oil remains at least $3 a barrel cheaper than Middle Eastern alternatives. Taking advantage of this opportunity while prices are low, more refineries may consider buying within the next week or two."