Oil prices extended their decline for the second consecutive session, pressured by weak risk appetite in global markets and growing concerns about slowing demand. Brent crude futures fell to around $62.18 per barrel, while West Texas Intermediate dropped to $58.54, marking their lowest level in five months.
This downward movement followed a warning from the International Energy Agency (IEA) about a potential significant supply surplus by 2026, prompting traders to reassess the balance between supply and demand. The agency’s report indicated that the market could face an oversupply of up to 4 million barrels per day by 2026, driven by rising production from OPEC and non OPEC producers, alongside a clear slowdown in global demand growth. The IEA also lowered its demand growth forecasts for 2025 and 2026, while OPEC maintained a contrasting outlook by raising its consumption estimates and gradually increasing production to reclaim market share fueling concerns of a growing supply glut.
At the same time, renewed trade tensions between the U.S. and China reignited uncertainty in financial markets after both nations imposed additional port fees, and U.S. President Donald Trump threatened to raise tariffs on Chinese goods to 100% and tighten restrictions on software exports. Meanwhile, Beijing announced expanded curbs on rare earth exports, heightening fears of slower global trade activity and weaker energy demand.
From a technical perspective, oil prices are facing strong pressure near current support zones, and with buying momentum still weak, the downward trend is expected to persist in the short term unless signs of a recovery in demand or a meaningful production cut by OPEC+ emerge. Investors are closely watching this week’s U.S. inventory data to assess supply-demand dynamics, as a further increase in stockpiles would likely reinforce the ongoing selling pressure.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
