Oil prices continued to hover near a five-month low on Wednesday, driven by escalating trade tensions between the U.S. and China and a forecasted global oil supply surplus by 2026. Brent crude futures dropped by 23 cents, or 0.4%, to $62.16 a barrel, while U.S. West Texas Intermediate futures fell by 14 cents, or 0.2%, to $58.56. Both benchmarks are on track for their lowest closing levels since May 7. The International Energy Agency (IEA) warned that the oil market could face a surplus of up to 4 million barrels per day next year, exacerbated by increased output from OPEC+ and sluggish demand. The U.S.-China trade dispute has intensified recently, with both nations imposing additional port fees on cargo ships, potentially disrupting global freight flows. U.S. Treasury Secretary Scott Bessent emphasized that Washington does not seek to escalate the conflict, noting President Donald Trump’s readiness to meet Chinese President Xi Jinping later this month. Meanwhile, China has tightened rare earth export controls, and Trump has threatened to raise tariffs on Chinese goods to 100%. Deflationary pressures persist in China, with falling consumer and producer prices in September, while U.S. investors anticipate further Federal Reserve rate cuts. In other developments, Britain imposed new sanctions on Russia’s largest oil companies, Lukoil and Rosneft, targeting 51 shadow fleet tankers to curb Kremlin revenues. Azerbaijan reported a 4.2% drop in oil output for the first nine months of the year. U.S. crude stockpiles are expected to rise by 0.2 million barrels, marking the first three-week increase since April.
Oil prices dip, stay near 5-month low on US-China trade tensions, looming supply surplus
