Oil Prices Slide for Second Day on Oversupply and Trade Worries
Oil prices fell for a second straight session on Tuesday, pressured by growing concerns over excess global supply and weaker demand due to ongoing tensions between the United States and China, the world’s two largest oil consumers.
Crude Benchmarks Extend Losses
Brent crude futures dropped 17 cents, or 0.28%, to $60.84 a barrel by 03:43 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) for November delivery, which expires later Tuesday, fell 0.52% to $57.22 per barrel. The more active December WTI contract slipped 19 cents, or 0.33%, to $56.83.
On Monday, both benchmarks hit their lowest levels since early May, as escalating trade frictions reignited fears of a global economic slowdown.
Market Turns to Contango on Supply Fears
Both Brent and WTI futures have shifted into a contango structure, where near-term prices trade below future contracts — a market signal of ample supply and weakening demand.
Prices have come under sustained pressure as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, continue to increase production. Analysts now expect a global oil surplus through this year and next, with the International Energy Agency (IEA) projecting an excess of nearly 4 million barrels per day by 2026.
Analysts Warn of Limited Rebound Potential
“The continued weakening of Brent’s monthly spread structure shows that oversupply pressures are becoming more evident,” analysts at Haitong Securities wrote in a note. “This will likely dampen market sentiment and reduce investors’ willingness to chase gains, limiting oil’s rebound potential.”
Goldman Sachs analysts also turned more bearish, forecasting that Brent crude could fall to $52 per barrel by Q4 2026. They said recent satellite and inventory data suggest the anticipated global oil surplus is already materializing, as reflected in reports from both the IEA and the U.S. Energy Information Administration (EIA).
U.S. Crude Inventories Expected to Rise
A preliminary Reuters poll on Monday indicated that U.S. crude stockpiles likely increased last week, ahead of official data releases from the American Petroleum Institute (API) and the EIA later this week.
Market sentiment remains cautious as traders monitor inventory trends, OPEC+ output levels, and U.S.-China trade developments for further direction in crude prices.
