Oil prices edged lower again on Wednesday, extending the previous session’s slump as traders reacted to forecasts of a looming supply glut and renewed trade tensions between the world’s top two oil consumers.
By 06:40 GMT, Brent crude futures were down 9 cents, or 0.14%, at $62.30 a barrel, while U.S. West Texas Intermediate futures dipped 3 cents, or 0.05%, to $58.67. Both benchmarks settled at five-month lows on Tuesday, reflecting growing pressure on energy markets.
On Tuesday, the International Energy Agency said the global oil market could be oversupplied by as much as 4 million barrels per day in 2026. That figure is higher than previously anticipated, with output expected to rise from both OPEC+ members and other producers even as demand remains subdued.
“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, senior oil analyst at LSEG.
The trade rift between United States and China has flared up again over the past week. Both countries have introduced additional port fees on shipping routes between them, increasing costs and threatening to disrupt freight flows — a development that could dampen global economic activity.
“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, market analyst at IG Group.
The tensions intensified when China announced expanded export controls on rare earth minerals, followed by U.S. President Donald Trump threatening to raise tariffs on Chinese goods to 100% and tighten software export restrictions 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,” noted Yang An, analyst at Haitong Futures.
Traders are now turning their attention to U.S. inventory data for fresh demand signals. A preliminary Reuters survey showed an expected 200,000-barrel increase in crude stockpiles for the week ending October 10, with gasoline and distillate inventories likely falling.
The American Petroleum Institute will release its weekly report at 4:30 p.m. EDT (2030 GMT) on Wednesday, followed by official figures from the U.S. Energy Information Administration on Thursday at 10:30 a.m. EDT (1430 GMT). Both publications were postponed due to the Columbus Day/Indigenous Peoples’ Day holiday earlier in the week.
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