Oil prices extended losses on Wednesday as rising OPEC+ supply and escalating U.S.-China trade tensions deepened concerns over global demand, prompting Bank of America to warn that Brent crude could drop below $50 per barrel in the months ahead.
In midday trading at 1:13p.m. ET on Wednesday, WTI crude was trading at $58.55, while Brent was trading at $62.14. The pullback leaves both benchmarks down about 5-6% since the start of October, marking their lowest levels in five months and erasing much of their late-summer gains. Natural gas eased to $2.989 per MMBtu, extending a weeklong slide as mild weather and steady output pressured prices.
According to Reuters, BofA analysts warned that growing supply from OPEC+ members, particularly Saudi Arabia, Iraq, and the UAE, has created a “persistent surplus that could swell inventories to 2020 highs.”
The bank said Brent could test sub-$50 territory if Chinese demand weakens further or if Washington intensifies tariffs on Beijing.
The latest warning comes as President Donald Trump renewed threats of a “massive tariff expansion” on Chinese goods, citing “unfair energy and technology practices.” The announcement rattled global markets, already facing pressure from weak industrial data out of China and a stronger dollar.
Yahoo Finance reported that traders remain cautious ahead of next month’s OPEC+ meeting, where delegates are expected to debate the pace of their output unwinding plan. Some Gulf producers have increased exports by nearly 400,000 barrels per day since September, while Russia’s output has held above 9.3 million bpd despite technical curbs.
In its October Oil Market Report, the International Energy Agency (IEA) trimmed its demand growth outlook to around 700,000 barrels per day for both 2025 and 2026 and raised supply projections, warning of a larger-than-expected surplus.
Global observed inventories climbed by 17.7 million barrels in August to a four-year high of 7.909 billion, while “oil on water” surged by 102 million barrels in September as Middle East and Americas exports swelled.
By Tom Kool for Oilprice.com
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