SINGAPORE: Oil prices fell on Wednesday, extending losses from the previous session, as investors weighed the International Energy Agency’s warning of a supply surplus in 2026 and U.S.-China trade tensions that could curtail demand.
Brent crude futures fell 21 cents, or 0.3%, to $62.18 a barrel by 0425 GMT, while U.S. West Texas Intermediate futures eased 16 cents, or 0.3%, to $58.54 a barrel.
The International Energy Agency said on Tuesday the global oil market could face a surplus next year of as much as 4 million barrels per day, a bigger glut than it earlier forecast, as OPEC+ producers and rivals raise output and demand remains sluggish.
“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.
The trade dispute between the United States and China, the world’s two largest oil consumers, has reignited in the past week, with both countries imposing additional port fees on ships carrying cargo between them.
That will raise trading costs and disrupt freight flows, likely lowering economic output.
“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.
The tensions between the world’s two largest economies intensified after China last week announced a major expansion of rare earth export controls and U.S. President Donald Trump threatened to raise tariffs on Chinese goods to 100% and tighten software export curbs from 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.
For a view on U.S. demand, traders will be awaiting weekly inventory data. U.S. crude oil stockpiles are expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll showed.
Six analysts polled by Reuters estimated on average that crude inventories rose by about 200,000 barrels in the week to October 10.
The weekly industry report from the American Petroleum Institute is expected at 4:30 p.m. EDT (2030 GMT) on Wednesday, and U.S. Energy Information Administration data at 10:30 a.m. EDT (1430 GMT) on Thursday.
Both reports are delayed by a day due to the Columbus Day/Indigenous Peoples’ Day holiday on Monday.
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