Oil prices slipped again Wednesday, hitting five-month lows, as rising U.S.–China trade friction and IEA warnings of a looming surplus in 2026 weighed on the market. Brent crude fell 48¢ (−0.8%) to $61.91, its lowest settlement since May 7. WTI dropped 43¢ (−0.7%) to $58.27, also marking its weakest close since early May.
The International Energy Agency projected a supply surplus of as much as 4 million barrels per day in 2026, citing aggressive production from OPEC+ and others even as demand remains fragile. The announcement reinforced bearish pressure on the market.
At the same time, renewed trade tensions between the U.S. and China deepened, with both sides imposing additional fees and controls. China continued its rare earth export restrictions, and the U.S. hinted at sweeping tariff escalation, tightening the outlook for global growth and fuel consumption.
Treasury Secretary Scott Bessent said Washington did not seek to escalate the trade war further, reaffirming that the planned Trump–Xi meeting in South Korea is still on track.
Other weak economic signals — for example, falling producer and consumer prices in China, and broader deflationary risks — added to concerns. Analysts now believe that for oil to recover, further Fed easing, a resolution in trade standoffs, or actual supply constraints will be needed.