Oil Prices Fall as US-China Trade Tensions Renew Economic Concerns
Oil prices slipped on Monday, pressured by growing fears of a global supply glut and escalating U.S.-China trade tensions, which raised worries about slower economic growth and weaker energy demand.
Brent crude futures dropped 24 cents, or 0.4%, to $61.05 per barrel by 00:32 GMT, while U.S. West Texas Intermediate (WTI) declined 21 cents, or 0.4%, to $57.33, erasing gains made on Friday.
Both benchmarks fell over 2% last week, marking their third straight weekly decline, weighed by the International Energy Agency’s forecast of a potential global oil oversupply by 2026.
Trade Tensions and Supply Fears Pressure Oil Markets
According to Toshitaka Tazawa, analyst at Fujitomi Securities, concerns over rising crude production from major oil-producing nations, combined with fears of an economic slowdown driven by renewed U.S.-China trade tensions, have increased selling pressure in oil markets.
He added that uncertainty surrounding an upcoming meeting between President Donald Trump and Russian President Vladimir Putin has further complicated market sentiment, especially as the U.S. intensifies pressure on buyers of Russian oil.
WTO and Global Impact of US-China Disputes
Last week, the World Trade Organization (WTO) chief urged the U.S. and China to de-escalate their trade dispute, warning that a long-term decoupling between the two largest economies could reduce global GDP by up to 7%.
The renewed trade confrontation has seen both countries impose additional port fees on vessels transporting goods between them, a move that could disrupt global shipping and energy supply chains.
Geopolitical Factors Add to Market Uncertainty
Meanwhile, Trump and Putin agreed to hold another summit on the war in Ukraine, even as Washington continued to pressure India and China to scale back purchases of Russian crude.
After meeting with Ukrainian President Volodymyr Zelensky at the White House on Friday, Trump called for both Russia and Ukraine to “end the war immediately,” even suggesting territorial concessions as a possible compromise.
Analysts noted that Western restrictions on Asian buyers of Russian oil could limit India’s imports starting in December, while potentially boosting discounted oil flows to China.
Rising US Output Adds to Supply Worries
On the production side, U.S. energy firms added oil and gas rigs for the first time in three weeks, according to data from Baker Hughes released Friday. The uptick in drilling activity added further pressure to prices, reinforcing concerns about an expanding global oil glut.
Summary
Oil prices extended their decline as supply concerns, U.S.-China trade frictions, and geopolitical uncertainty continued to weigh on global energy markets. With growing signals of oversupply and political tensions shaping trade and production, investors are adopting a cautious outlook heading into the final quarter of the year.
