Oil Prices Edge Higher in Volatile Trading as Investors Weigh Supply and Trade Outlook
Oil prices rose slightly on Tuesday during a volatile trading session, as investors weighed signals of potential oversupply and awaited clarity on the ongoing U.S.–China trade dispute — a key factor for global energy demand.
At 11:38 a.m. ET (15:38 GMT), Brent crude futures climbed 23 cents, or 0.4%, to $61.24 a barrel, while U.S. West Texas Intermediate (WTI) crude for November delivery gained 22 cents, or 0.4%, to $57.74. Both contracts had dropped to their lowest levels since early May on Monday, pressured by record U.S. oil production and OPEC’s decision to proceed with planned supply increases.
Concerns Over Oversupply and Global Demand
Traders remain cautious as rising output and global economic uncertainty increase fears of a supply glut.
The ongoing U.S.–China trade tensions have amplified worries that a slowdown in global growth could weaken oil demand.
However, both sides have shown efforts to ease the dispute. U.S. President Donald Trump said on Monday that he expects to reach a “fair trade deal” with Chinese President Xi Jinping when they meet in South Korea next week.
Experts Divided on Oil’s Next Move
Analysts are split on the future direction of crude prices.
Both Brent and WTI futures have started shifting into contango — a market structure where near-term prices are lower than those for future delivery. This typically signals ample supply and softer demand in the short term.
The International Energy Agency (IEA) recently forecast that next year’s surplus could create a “super contango” pattern, but this scenario hasn’t materialized yet.
According to UBS analyst Giovanni Staunovo, the oil market appears oversupplied but not in a glut, and prices are likely to stabilize around current levels, though renewed trade tensions could pressure them further.
A Reuters poll released Monday indicated that U.S. crude inventories likely rose again last week — reinforcing expectations of a bearish near-term outlook.
Scott Shelton, energy specialist at TP ICAP Group, commented that “the reality of stock builds appears to be here, and prices could fall further to deepen the contango.”
