Oil prices settled at their lowest since early May on Monday as oversupply concerns deepened and renewed U.S.–China trade tensions raised fears of slowing global demand. Brent crude futures fell 28¢ (-0.46%) to $61.01 per barrel, while U.S. West Texas Intermediate (WTI) eased 2¢ (-0.03%) to $57.52 — both benchmarks closing at their weakest levels in over five months. Earlier in the session, both contracts had dropped by more than $1.
Market sentiment has shifted decisively from worries about under-supply to fears of a global glut. The Brent and WTI six-month spreads flipped into contango — a market structure where near-term contracts trade below later ones — for the first time since the spring, reflecting growing expectations that traders may resort to floating storage as inventories swell.
“These glut fears are now descending onto the market,” said John Kilduff of Again Capital. “We will start to see floating storage pick up and inland tanks get filled.”
Both benchmarks have fallen for three consecutive weeks, pressured by the International Energy Agency’s forecast of a major supply surplus in 2026 and sluggish global demand growth.
Tensions between the U.S. and China intensified after both countries imposed additional port fees on cargoes between them — moves that could disrupt global freight flows and further weaken oil demand.
The World Trade Organization warned that a prolonged U.S.–China decoupling could reduce global economic output by as much as 7%.
On the supply side, U.S. energy firms last week added drilling rigs for the first time in three weeks, while analysts surveyed by Reuters expect U.S. crude inventories to have risen by about 1.5 million barrels in the latest reporting week.
Despite the bearish tone, analysts at Gelber & Associates noted that the market remains in a “shoulder-season mix” — balancing refinery maintenance, soft product margins, and cautious anticipation ahead of weekly inventory data.