During Tuesday’s Asian session, oil prices remained largely unchanged, finding footing after recent steep drops sparked by concerns over rising output and weakening global demand as economic headwinds grow.
Although fresh U.S. sanctions threats against buyers of Russian crude emerged, the market’s decline persisted, further pressured by a stronger U.S. dollar.
As of 21:23 ET (01:23 GMT), September Brent futures edged down slightly by 0.1% to $68.72 a barrel, while West Texas Intermediate futures slipped 0.1% to $65.23 a barrel.
Oversupply and Slowing Growth Cloud Oil Outlook
Brent and WTI futures hit their lowest levels in a week, dragged down by fears of excess supply. OPEC+ agreed over the weekend to boost production by 547,000 barrels per day for September, marking the second consecutive monthly increase.
This ongoing production rise is part of the group’s effort to unwind previous output cuts from the last three years and regain lost market share.
The increased supply outlook contrasts with mounting worries about demand softness, as global economic growth decelerates.
Market jitters were fueled by weak U.S. jobs data, which raised concerns about potential fuel consumption drops in the world’s largest oil consumer. Trade tensions driven by President Trump’s tariff policies also added uncertainty to the economic landscape.
Additionally, China — the top global oil importer — reported a sharper-than-anticipated contraction in its manufacturing sector last week, deepening concerns about future energy demand.
A firmer dollar exerted additional pressure on crude prices, though this was partially offset by the recent soft economic data in the U.S.
Russian Oil Sanctions Keep Market Alert
Oil prices found some support last week after President Trump announced plans for tougher sanctions on Russian oil buyers in response to Russia’s ongoing war in Ukraine.
Trump targeted China and India, the largest importers of Russian crude, imposing a 25% tariff on Indian imports and threatening harsher penalties if the purchases continued. He reiterated these warnings on Monday.
The prospect of stricter sanctions has introduced some upward momentum for oil prices, as such measures could further constrain global supply.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.