Oil prices fell Tuesday, extending losses to a second straight session as the International Energy Agency (IEA) warned of a potential 2026 supply glut and U.S.–China trade tensions lingered, weighing on the demand outlook. Brent crude settled $0.93 (-1.5%) lower at $62.39, while WTI closed $0.79 (-1.3%) lower at $58.70 — both marking five-month lows.
The IEA projected that the global oil market could face a surplus of up to 4 million barrels per day next year as OPEC+ members and non-OPEC producers expand output amid tepid demand growth. The view contrasted with OPEC’s latest report, which anticipated only a gradual easing of deficits into 2026 as the group proceeds with modest supply increases.
Analysts said sentiment was further pressured by renewed U.S.–China trade frictions, after Beijing expanded rare-earth export controls and Washington threatened 100% tariffs and new software restrictions from November 1.
“The latest tensions between the U.S. and China will also be a pressure point on crude as China’s economy could be in question if tensions stay elevated,” said Dennis Kissler of BOK Financial.
Market structure reflected growing supply anxiety: the Brent six-month spread narrowed to its smallest premium since May, while the WTI spread hit its tightest since January — signaling weaker backwardation as near-term supplies build.