Oil prices edged lower on Monday during Asian trading, as renewed United States-China trade frictions and concerns about an oversupply in global markets dampened sentiment.
By 4:10 pm AEDT (5:10 am GMT), Brent crude futures slipped 17 cents, or 0.3%, to $61.13 per barrel, while U.S. West Texas Intermediate futures lost 19 cents, or 0.3%, to $57.35 per barrel.
Both benchmarks recorded their third consecutive weekly declines last week, with Brent down 2.3% and WTI falling 3%. Losses were partly driven by the International Energy Agency’s forecast of a growing global surplus in 2026.
ANZ analysts noted in a client report: “The International Energy Agency warned last week that next year’s surplus could be as high as 4mb/d. That is up roughly 18% from last month’s estimate, but the geopolitical backdrop is still challenging.
“The outlook for demand is complicated by the on-again off-again trade tensions between the U.S. and China.”
The head of the World Trade Organization last week urged Washington and Beijing to de-escalate trade hostilities, cautioning that a decoupling of the world’s two largest economies could slash global economic output by as much as 7% over the longer term.
The two nations have recently reignited their trade conflict, introducing additional port fees on cargo shipments between them - tit-for-tat measures that risk further disruption to global freight flows.
Meanwhile, geopolitical developments continued to influence market sentiment. President Donald Trump and Russian President Vladimir Putin agreed on Thursday to hold another summit on the war in Ukraine, as Washington simultaneously pressured India and China to curb purchases of Russian oil.
After meeting Ukrainian President Volodymyr Zelenskyy at the White House on Friday, Trump reiterated his call for an end to hostilities, urging both sides to “stop the war immediately”, even if it requires territorial concessions from Ukraine.
On the supply side, U.S. energy firms increased the number of operating oil and natural gas rigs for the first time in three weeks, according to energy services company Baker Hughes’ closely watched report released Friday.
