Oil down as market weighs excess supply and US-China trade tensions

Core Viewpoint - Oil prices are declining due to concerns over a potential supply surplus predicted by the International Energy Agency and ongoing trade tensions between the U.S. and China [1][2]. Group 1: Oil Price Movements - Brent crude futures decreased by 21 cents, or 0.3%, to $62.18 per barrel, while U.S. West Texas Intermediate futures fell by 13 cents, or 0.2%, to $58.57 per barrel [1]. - Both Brent and WTI contracts closed at five-month lows in the previous trading session [1]. Group 2: Supply and Demand Dynamics - The International Energy Agency forecasts a global oil market surplus of up to 4 million barrels per day in the next year, driven by increased output from OPEC+ and sluggish demand [2]. - Analysts indicate that the market is currently focused on excess supply amid mixed demand signals, with geopolitical risks and trade tensions further pressuring prices [2]. Group 3: Trade Tensions Impact - The trade dispute between the U.S. and China has escalated, with both nations imposing additional port fees, which could raise trading costs and disrupt freight flows, potentially lowering economic output [3]. - Recent actions include China's announcement of increased rare earth export controls and U.S. threats to raise tariffs on Chinese goods to 100% [4]. Group 4: U.S. Demand Indicators - Traders are awaiting weekly inventory data, with expectations that U.S. crude oil stockpiles rose by approximately 200,000 barrels in the week ending October 10 [5]. - The American Petroleum Institute's weekly industry report and U.S. Energy Information Administration data are anticipated, providing further insights into inventory changes [6].