Oil prices hold steady, oversupply concerns at forefront
Oil prices held steady on Tuesday after a fall in the previous session as concerns about oversupply and risks to demand, along with the trade dispute between the U.S. and China, the world's top two oil consumers, weigh on the markets.
Brent crude futures were unchanged at $61.01 a barrel at 0832 GMT. The U.S. West Texas Intermediate crude (WTI) contract for November delivery, set to expire on Tuesday, was down 15 cents at $57.37. The more active December contract was steady at $57.02.
Prices declined to their lowest since early May on Monday on the concerns around oversupply and slowing economic growth resulting from the recent escalations in the U.S.-China trade dispute.
"Speculative bets on lower prices are likely to persist as long as Brent remains below $65," said Ole Hansen, head of commodity strategy at Saxo Bank.
Both WTI and Brent have shifted to contango market structures, where prices for immediate supply are lower than for later delivery and which typically indicate that near-term supply is abundant and demand is declining.
Prices have fallen as the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, have pushed ahead with plans to add more oil to the market. This has led analysts to predict a surplus of crude this year and next, with the International Energy Agency last week projecting a global surplus of nearly 4 million barrels per day in 2026.
Goldman Sachs analysts expect Brent prices to hit $52 a barrel in the fourth quarter of 2026, but the decline in prices may take time to materialise due to larger-than-seasonal OECD commercial builds in November being priced in and accelerating builds expected in January. This, along with continued strength in diesel refining margins, was supporting crude demand.
A preliminary Reuters poll on Monday showed that U.S. crude oil stockpiles likely rose last week, ahead of weekly reports from the American Petroleum Institute and the EIA. For the week ending October 10, crude builds where more than expected while gasoline and diesel stocks drew more than forecast.
Source: Reuters.com
