Oil prices continued their downward trend on Wednesday as investors digested warnings from the International Energy Agency (IEA) about a potential global supply surplus in 2026, alongside renewed U.S.-China trade tensions that could weigh on demand.
Brent crude futures slipped 9 cents, or 0.14%, to $62.30 a barrel by 07:40 AM WAT, while U.S. West Texas Intermediate (WTI) eased 3 cents, or 0.05%, to $58.67 a barrel. Both contracts had closed at five-month lows in the previous session.
The IEA said on Tuesday that the global oil market could face a surplus of up to four million barrels per day in 2026, a larger glut than previously forecast. The agency cited rising output from OPEC+ producers and other rivals, combined with sluggish demand, as key drivers of the expected oversupply.
Investors are also wary of escalating trade tensions between the United States and China, the world’s two largest economies and oil consumers. Both countries recently imposed additional port fees on cargo shipments, raising trading costs and potentially disrupting freight flows. Tensions intensified after China announced a major expansion of rare earth export controls, while U.S. President Donald Trump threatened to raise tariffs on Chinese goods to 100% and tighten software export curbs starting November 1. Analysts warn these moves could slow economic output and reduce oil demand.
Traders will be closely monitoring U.S. weekly inventory data for insights into domestic oil demand. According to a preliminary Reuters poll, crude stockpiles likely rose by about 200,000 barrels in the week ending October 10, while gasoline and distillate inventories are expected to have fallen.
With a potential supply glut looming and geopolitical tensions mounting, oil markets face continued uncertainty. Analysts caution that both global output trends and trade developments will play a crucial role in shaping price movements in the coming months.
