At 14:39 GMT, Light Crude Oil Futures are trading $58.31, down $1.18 or -1.98%.
US-China Tensions and Sanctions Hit Market Sentiment
Sentiment was further rattled by renewed U.S.-China trade conflict. Beijing issued sanctions against five U.S.-linked South Korean shipbuilder subsidiaries, while both nations are moving to impose additional port fees on ocean shipping firms. These developments come after threats of 100% tariffs and tech export curbs from Washington, dampening risk appetite.
Though U.S. Treasury Secretary Scott Bessent noted that President Trump is still expected to meet with President Xi later this month, traders remain cautious. UBS analyst Giovanni Staunovo noted that the “risk-off mood” and escalating tariff threats are clouding the demand outlook.
IEA Projects 4 Million bpd Surplus in 2026, Warns of Sluggish Demand
The International Energy Agency (IEA) added to the bearish tone, forecasting a global supply surplus of up to 4 million barrels per day in 2026—nearly 4% of world demand. The agency also revised its 2025 demand growth forecast down to 710,000 bpd, citing a weak economic backdrop and faster adoption of transport electrification.
September data showed global oil supply surged 5.6 million bpd year-over-year, with OPEC+ responsible for 3.1 million bpd of that increase. Seaborne oil volumes also jumped by 102 million barrels last month, the largest build since the pandemic, driven by rising Middle East output.
OPEC Counters IEA, But Supply Build Narrows Forecast Gap
OPEC maintains a more constructive outlook, projecting 1.3 million bpd in demand growth this year and a slight acceleration in 2026. The group expects a balanced market next year, with a marginal 50,000 bpd deficit if current production levels hold. That view contrasts with IEA projections, but the forecast gap is narrowing as OPEC+ rapidly unwinds prior output cuts.
