At 12:46 GMT, Light Crude Oil Futures are trading $57.61, up $0.59 or +1.03%.
Oil Market Rebounds After Recent Lows
Oil prices are stabilizing following a steep decline on Monday, when they hit their lowest levels since early May. Traders reacted to concerns over a potential supply glut and deteriorating demand outlook due to the ongoing U.S.-China trade dispute. However, Tuesday’s recovery reflects easing fears of near-term oversupply and a growing sentiment that recent selloffs may have been overdone.
The market had priced in the impact of OPEC+ supply additions and slowing global demand. Yet, signs are emerging that fundamentals may not deteriorate as sharply as previously feared.
Both West Texas Intermediate (WTI) and Brent crude have moved into contango—a market structure where near-term prices are lower than longer-dated contracts—often seen as a signal of weakening demand and ample supply. Still, analysts caution that the contango is not yet severe enough to suggest a major imbalance.
Analysts Question Severity of Supply Glut
Despite the contango structure, several analysts argue the current fundamentals do not support panic selling. Ole Hansen of Saxo Bank noted that market behavior doesn’t yet reflect conditions that would drive significant inventory builds.
UBS’s Giovanni Staunovo echoed this, saying the futures curve has not steepened into a “super contango,” which would signal a far more serious surplus as projected by the International Energy Agency.
