Oil prices fell slightly in Asian trade on Wednesday, remaining under pressure from heightened U.S.-China trade tensions, while the International Energy Agency’s warning of a looming supply glut also weighed.
Prices remained pinned at five-month lows after the U.S.’ threat of more trade tariffs on China sparked steep losses in crude, as markets feared that a renewed trade war could hurt oil demand.
Weak inflation data from China added to oil’s woes, amid signs of continued economic weakness in the world’s largest oil importer.
The IEA’s warning of a 2026 supply glut added to pressure on oil prices. But bigger losses in crude were limited by some weakness in the dollar, following dovish overnight comments from Federal Reserve officials.
Brent oil futures for December fell 0.2% to $62.26 a barrel, while West Texas Intermediate crude futures fell 0.2% to $58.18 a barrel by 21:39 ET (01:39 GMT).
IEA warns of supply surplus in 2026 The IEA said in a monthly report on Tuesday that the global oil market could see a supply overshoot of as much as 4 million barrels, a bigger surplus than it had previously forecast.
The IEA cited rising oil production– especially in the Organization of Petroleum Exporting Countries, and sluggish demand as the key drivers of the expected surplus. The agency also trimmed its oil demand growth estimate for 2025 and 2026.
The IEA report was in sharp contrast to a monthly report from the OPEC released earlier this week, which forecast demand would rise by at least 100% more than the IEA’s outlook.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The OPEC steadily increased its production this year, as the cartel wound back two years of production cuts to gain a greater market share.
But this move ramped up concerns over a supply glut, especially amid signs of cooling global demand.
US-China trade tensions, inventory data in focus Oil tumbled this week after U.S. President Donald Trump threatened more trade tariffs and restrictions against China, reigniting trade tensions between the world’s biggest economies.
Trump threatened to impose 100% tariffs on China, drawing a sharp rebuke from Beijing, which warned that it stood ready to fight any trade war.
Weaker-than-expected Chinese inflation data added to oil’s woes, amid continued signs of economic weakness in the world’s biggest oil importer.
U.S. inventory data due in the coming days will be watched for more cues on fuel demand, especially amid a prolonged government shutdown.
