Oil down as market weighs excess supply and US-China trade tensions
Oil prices edged lower on Wednesday, as investors weighed the International Energy Agency's prediction of a supply surplus in 2026 and trade tensions between the United States and China that could curtail demand.
Brent crude futures fell 21 cents, or 0.3%, to $62.18 a barrel by 0854 GMT, while U.S. West Texas Intermediate futures eased 13 cents, or 0.2%, to $58.57 a barrel.
Both contracts closed at five-month lows in the previous trading session.
The International Energy Agency said on Tuesday the global oil market could face a surplus next year of up to 4 million barrels per day, more than it earlier forecast, as OPEC+ and other producers raise output and demand remains sluggish.
The trade dispute between the United States and China, the world's two largest oil consumers, has reignited over the last week, with both countries imposing additional port fees on ships carrying cargo between them. That will raise trading costs and disrupt freight flows, likely lowering economic output.
The tensions between the world's two largest economies intensified after China last week announced it would increase rare earth export controls and U.S. President Donald Trump threatened to raise tariffs on Chinese goods to 100% and tighten software export curbs from November 1.
For a view on U.S. demand, traders await weekly inventory data. U.S. crude oil stockpiles are expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll showed.
Six analysts polled by Reuters estimated on average that crude inventories rose by about 200,000 barrels in the week to October 10.
The weekly industry report from the American Petroleum Institute is expected at 4:30 p.m. EDT (2030 GMT) on Wednesday, and U.S. Energy Information Administration data at 10:30 a.m. EDT (1430 GMT) on Thursday.
Both reports are delayed by a day due to the Columbus Day/Indigenous Peoples' Day holiday on Monday.
Source : Reuters.com
