Global oil prices fell to five-month lows this week as mounting concerns over a supply glut combined with uncertainty around US-China trade relations weighed heavily on market sentiment. Brent crude slipped below $61 per barrel, while West Texas Intermediate (WTI) edged closer to $57, pressured by record-high crude inventory levels and fears of slowing demand.
According to industry data, crude stored at sea reached a historic peak of 1.24 billion barrels as of mid-October, reflecting an oversupplied market as OPEC+ producers increase output and US shale production remains robust. The International Energy Agency recently warned of a possible surplus of nearly 4 million barrels per day in 2026 due to rising production and subdued demand growth.
Meanwhile, ongoing trade tensions between the US and China continue to cast doubt on global economic prospects. Despite President Donald Trump’s expressed optimism about sealing a trade deal with President Xi Jinping at the upcoming APEC summit, concerns linger as tariffs and export restrictions persist. Analysts attribute the negative price pressure in part to these geopolitical uncertainties, which threaten to dampen energy consumption worldwide.
“The combination of excessive supply and the potential economic slowdown stemming from US-China trade frictions is fueling selling pressure,” noted a market analyst from Fujitomi Securities.
In this challenging environment, oil investors remain cautious, balancing price declines with an undercurrent of geopolitical risk that could periodically support crude values. The evolving trade dynamics and production policies will be key factors determining oil price direction in the near term.
