Oil prices slipped as IEA flagged surplus, US-China tensions weighed on sentiment
The IEA said in its latest report that the world oil market could face a surplus of up to 4 million barrels per day next year as producers within and outside OPEC+ ramp up output amid sluggish demand growth.
Oil prices retreated on Tuesday, pressured by renewed US-China trade tensions and a bearish outlook from the International Energy Agency (IEA), which warned of a significant global supply glut emerging in 2026.
Brent crude settled 93 cents lower, or 1.5%, at $62.39 a barrel.
WTI fell 79 cents, or 1.3%, to $58.70. Both benchmarks closed at their weakest levels in five months, reversing the previous session’s modest gains.
The IEA said in its latest report that the world oil market could face a surplus of up to 4 million barrels per day next year as producers within and outside OPEC+ ramp up output amid sluggish demand growth. The warning contrasted with Monday’s monthly outlook from OPEC+, which projected a narrower supply gap and a gradual rebalancing as the alliance proceeds with its planned production increases.
Traders said sentiment turned risk-off following the IEA assessment, with fears of oversupply amplifying concerns over slowing economic momentum in China and the United States. Analysts noted that trade frictions and the IEA’s outlook combined to trigger a broader pullback in risk assets, with price pressure likely to persist unless negotiations yield progress.
Written: Aiman Haikal