Oil prices hit five-month low on US-China tensions and surplus fears

Oil prices extended losses on Wednesday, slipping to their lowest in five months as escalating US-China trade tensions and mounting supply concerns weighed on sentiment.

Brent crude fell 48 cents, or 0.8%, to settle at $61.91 a barrel. 

WTI declined 43 cents, or 0.7%, to $58.27. Both benchmarks marked their weakest closes since 7 May for a second consecutive session.

The market remained under strain as escalating trade frictions between the world’s two largest economies threatened to disrupt global freight flows and dampen industrial demand. Both countries introduced new port fees on shipments, while broader tariff and export restrictions further clouded the economic outlook.

Weak consumer and producer price data from China reinforced fears of a slowing economy, with persistent deflationary pressures and a subdued property market adding to concerns over demand in the world’s biggest crude importer.

On the supply side, the International Energy Agency warned this week that global oil markets could face a surplus of up to 4 million barrels per day in 2026 as OPEC+ producers continue to raise output amid sluggish consumption growth. The projection deepened bearish sentiment, with traders increasingly focused on the risk of sustained oversupply through next year.

Written: Aiman Haikal