Oil prices showed little movement during Tuesday’s Asian trading session, stabilizing after a recent steep decline driven by worries over growing supply and weakening demand as global economic challenges intensify.
Despite threats of additional U.S. sanctions targeting buyers of Russian oil, crude continued to face downward pressure, compounded by a firmer U.S. dollar.
By 21:23 ET (01:23 GMT), September Brent futures edged down 0.1% to $68.72 per barrel, while West Texas Intermediate (WTI) crude futures also slipped 0.1% to $65.23 per barrel.
Supply Glut and Slowing Demand Weigh on Oil
Brent and WTI prices fell to their lowest levels in a week, pressured by ongoing concerns about rising production volumes. Over the weekend, OPEC+ confirmed another production increase, adding 547,000 barrels per day for the second month running.
This marks the latest in a series of output hikes this year, as the coalition seeks to reverse the cuts implemented over the past three years and regain greater market share.
These production boosts signal higher supply levels ahead, even as worries mount over declining global demand due to slower economic growth.
The market’s anxiety was heightened by disappointing U.S. nonfarm payroll figures, suggesting a potential drop in fuel consumption from the world’s largest oil user. Additional uncertainty stemmed from concerns about the impact of President Donald Trump’s trade tariffs on the U.S. economy.
Adding to bearish sentiment, China — the world’s biggest oil importer — reported a sharper-than-expected slowdown in manufacturing activity last week, as indicated by weak purchasing managers index (PMI) data.
Although a stronger dollar exerted some downward pressure on crude, this was somewhat balanced by the weak U.S. economic indicators.
Sanctions on Russian Oil Buyers Keep Market on Edge
Last week saw some price support following President Trump’s threats to expand sanctions on countries importing Russian oil amid the ongoing Ukraine conflict.
Trump recently targeted Russia’s largest oil purchasers, China and India, with a 25% tariff imposed on India and warnings of harsher penalties if India did not halt its Russian crude imports immediately. He reiterated these threats on Monday.
The looming possibility of more stringent U.S. sanctions on Russian oil buyers has added a layer of support to oil prices, as such measures could tighten global supply even further.
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