Oil prices continued to decline on Wednesday, adding to the previous session’s losses as investors digested warnings of a looming supply glut and renewed trade frictions between the world’s two biggest energy consumers.
Brent crude futures slipped 9 cents, or 0.14%, to $62.30 a barrel by 06:40 GMT, while U.S. West Texas Intermediate futures eased 3 cents, or 0.05%, to $58.67. Both benchmarks had ended Tuesday at their lowest levels in five months.
The International Energy Agency warned on Tuesday that the oil market could face an oversupply of up to 4 million barrels per day in 2026 — a larger surplus than previously expected — as OPEC+ producers and other suppliers increase output while demand remains weak.
“The market is focusing on excess supply amid mixed demand signals. Ebbing geopolitical risks and escalating trade tensions are also adding further pressure on prices,” said Emril Jamil, a senior oil analyst at LSEG.
Tensions between United States and China have intensified over the past week, with both countries imposing new port fees on vessels carrying goods between them. The additional costs are expected to weigh on trade flows and economic growth.
“The focus will remain on the recent re-escalation in trade tensions between the US and China and the risks it brings to the global economy,” said Tony Sycamore, a market analyst at IG Group.
The dispute escalated after Beijing announced tougher export controls on rare earth minerals, while U.S. President Donald Trump threatened to raise tariffs on Chinese imports to 100% and tighten software export restrictions starting November 1.
“Beyond U.S.-China trade relations and the progress of talks, the key for oil prices now is the degree of oversupply, reflected in changes in global inventories,” said Yang An, analyst at Haitong Futures.
Traders are also closely monitoring U.S. inventory data for signs of demand trends. A preliminary Reuters poll showed that crude stockpiles likely rose by about 200,000 barrels in the week ending October 10, while gasoline and distillate inventories may have declined.
The weekly industry report from the American Petroleum Institute is due at 4:30 p.m. EDT (2030 GMT) on Wednesday, followed by official figures from the U.S. Energy Information Administration at 10:30 a.m. EDT (1430 GMT) on Thursday. Both reports were pushed back one day due to the Columbus Day/Indigenous Peoples’ Day holiday.
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