Oil prices edged lower on Wednesday as investors weighed the International Energy Agency’s (IEA) forecast of a global supply surplus in 2026 and escalating trade tensions between the United States and China that could dampen demand.
Brent crude futures fell 21 cents, or 0.3%, to $62.18 a barrel by 0854 GMT, while U.S. West Texas Intermediate (WTI) futures dropped 13 cents, or 0.2%, to $58.57 a barrel. Both benchmarks had closed at five-month lows in the previous session.
The IEA said on Tuesday that the global oil market could see a surplus of up to 4 million barrels per day next year, exceeding earlier estimates, as OPEC+ and other producers increase output while demand growth remains weak.
“The market is focusing on excess supply amid mixed demand signals. Ebbing geopolitical risks and escalating trade tensions are also adding further pressure on prices,” said Emril Jamil, senior oil analyst at LSEG.
The trade dispute between the U.S. and China — the world’s two largest oil consumers — has flared up again, with both countries imposing additional port fees on cargo shipments. Analysts say the measures could disrupt trade flows and reduce economic output.
“Oil prices are currently influenced by trade tensions and market risk sentiment,” noted UBS analyst Giovanni Staunovo.
Tensions intensified after China announced new controls on rare earth exports, and U.S. President Donald Trump threatened to raise tariffs on Chinese goods to 100% and tighten software export restrictions from November 1.
“Beyond U.S.-China trade relations and the progress of talks, the key for oil prices now is the degree of oversupply, reflected in changes in global inventories,” said Yang An, analyst at Haitong Futures.
Traders are also awaiting U.S. inventory data for signs of domestic demand trends. A preliminary Reuters poll suggested crude stockpiles rose by about 200,000 barrels in the week to October 10, while gasoline and distillate inventories likely fell.
The American Petroleum Institute’s weekly report is due at 4:30 p.m. EDT (2030 GMT) on Wednesday, followed by the U.S. Energy Information Administration’s data at 10:30 a.m. EDT (1430 GMT) on Thursday. Both releases were delayed by a day due to Monday’s Columbus Day/Indigenous Peoples’ Day holiday.
Source:Africa Publicity
