Oil prices fell nearly 2% on Monday as growing concerns over a potential global oversupply and renewed U.S.-China trade tensions fueled worries about an economic slowdown and weaker energy demand.
Brent crude futures dropped $1.06, or 1.7%, to $60.23 a barrel as of 13:12 GMT, while U.S. West Texas Intermediate (WTI) futures fell $1.03, or 1.8%, to $56.51.
Market sentiment has shifted from fears of under-supply to worries about over-supply, reflected in the Brent futures curve. The six-month spread for Brent has moved into contango — where near-term contracts trade below later-dated ones — encouraging traders to store oil for future sale at higher prices.
The Brent contango, which first reappeared last Thursday after a brief period in May, has deepened to minus 56 cents, its widest level since late 2023.
Both crude benchmarks fell more than 2% last week, marking a third straight weekly loss, following the International Energy Agency’s forecast of a growing supply surplus expected in 2026.
Adding to pressure, global trade worries resurfaced as World Trade Organization chief Ngozi Okonjo-Iweala urged the U.S. and China to ease tensions, warning that a prolonged decoupling between the world’s two largest economies could shrink global output by as much as 7% in the long term.
The two top oil consumers have recently reignited their trade dispute, imposing additional port fees on cargoes moving between them — measures that risk disrupting global shipping flows.
Meanwhile, uncertainty lingers over Russian oil supplies. U.S. President Donald Trump reiterated on Sunday that Washington would maintain “massive” tariffs on India unless it halts imports of Russian crude.
EU Moves Toward Ending Russian Gas Imports by 2028 in Bid to Cut Kremlin Revenues
On the production side, U.S. energy firms added oil rigs last week for the first time in three weeks, according to data from energy services company Baker Hughes.
Trump Threatens India of ‘Massive’ Tariffs Unless Russian Oil Imports End
Source:Africa Publicity
