NEW YORK -Oil prices dipped on Wednesday, holding near a five-month low for a second day, pressured by escalating U.S.-China trade tensions and the International Energy Agency’s prediction of a supply surplus in 2026.
Brent crude futures fell 23 cents, or 0.4%, to $62.16 a barrel at 11:11 a.m. EDT . U.S. West Texas Intermediate futures fell 14 cents, or 0.2%, to $58.56. Both benchmarks were headed for their lowest closes since May 7 for a second day in a row.
Bank of America said Brent prices could slip below $50 a barrel if U.S.-China trade tensions intensify while OPEC production ramps up.
On Tuesday, the IEA said the global oil market could face a surplus next year of up to 4 million barrels per day, wider than its previous forecast, as OPEC and others raise output and demand remains sluggish.
The trade dispute between the world’s two largest oil consumers has reignited over the last week, with the U.S. and China imposing additional port fees on ships carrying cargo between them. The tit-for-tat moves could disrupt global freight flows.
U.S. Treasury Secretary Scott Bessent on Wednesday insisted that Washington did not want to escalate the trade conflict, stressing that President Donald Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.
Last week, China announced it would increase rare earth export controls and Trump threatened to raise tariffs on Chinese goods to 100% and tighten software export curbs from November 1.
Deflationary pressures persisted in China, with both consumer and producer prices falling in September, as a prolonged property market slump and trade tensions also weighed.
In the U.S., investors are becoming more convinced that the Federal Reserve will keep cutting interest rates.
On Tuesday, Fed Chair Jerome Powell left the door open to further rate cuts and said the end of the central bank’s long effort to shrink the size of its holdings may be near. Looser economic policies can boost economic growth and demand for oil.
Britain on Wednesday targeted Russia’s two largest oil companies, Lukoil and Rosneft, and 51 shadow fleet tankers in what it described as a new bid to tighten energy sanctions and choke off Kremlin revenues.
Russia was the second-biggest producer of crude oil in the world after the U.S. in 2024, according to U.S. energy data. Any increase in sanctions due to Moscow’s war with Ukraine should keep more of that oil out of global markets.
In Azerbaijan, oil output fell by 4.2% to 20.7 million metric tons in January-September from 21.6 million metric tons a year earlier, the energy ministry said on Wednesday.
Azerbaijan is a member of the OPEC group of countries, the Organization of the Petroleum Exporting Countries and allies.
The American Petroleum Institute trade group and the U.S. Energy Information Administration are due to release weekly U.S. inventory data on Wednesday and Thursday, [EIA/S] [I/S] a day later than usual due to the U.S. Columbus Day/Indigenous Peoples’ Day holiday on Monday.
Analysts forecast U.S. crude stockpiles rose by about 0.2 million barrels last week.
If correct, that would be the first time energy firms added oil to storage for three weeks in a row since April. That compares with a decrease of 2.2 million barrels during the same week last year and an average increase of 1.1 million barrels over the past five years .
This article was generated from an automated news agency feed without modifications to text.
