Oil down as market eyes excess supply, US-China trade tensions

Core Viewpoint - Oil prices are declining due to concerns over a potential supply surplus in 2026 and ongoing U.S.-China trade tensions that may impact demand [1][2][3] 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 16 cents, or 0.3%, to $58.54 per barrel [1] - Both Brent and WTI contracts reached five-month lows in the previous trading session [1] Group 2: Supply and Demand Dynamics - The International Energy Agency (IEA) projected a global oil market surplus of up to 4 million barrels per day in the upcoming year, exceeding earlier forecasts due to increased output from OPEC+ and other producers amid sluggish demand [2] - Analysts indicate that the market is currently focused on excess supply, influenced by mixed demand signals and geopolitical risks [2] Group 3: U.S.-China Trade Tensions - The trade dispute between the U.S. and China has escalated, with both nations imposing additional port fees, which could increase trading costs and disrupt freight flows, potentially lowering economic output [3] - Recent developments include China's expansion of rare earth export controls and threats from the U.S. to raise tariffs on Chinese goods to 100% [4] Group 4: U.S. Crude Inventory Expectations - Traders are anticipating an increase in U.S. crude oil stockpiles, with estimates suggesting a rise of about 200,000 barrels for the week ending October 10 [5] - The American Petroleum Institute's weekly industry report and U.S. Energy Information Administration data are expected to provide further insights into inventory levels [6]