Oil prices fell on Wednesday amid the International Energy Agency's (IEA) warning of a potential global supply surplus in 2026 and renewed trade tensions between the world's top oil consumers, the US and China, fueled uncertainty in the markets.
Brent crude was trading at $61.99 per barrel at 10.31 a.m. local time (0731 GMT), down 0.1% from the previous close of $62.06.
US benchmark West Texas Intermediate (WTI) decreased by 0.1% to $58.16 from $58.22 in the prior session.
Brent crude, which posted its lowest close since May on Tuesday following the IEA's warning of a potential supply surplus, extended its decline on Wednesday.
According to IEA's latest Oil Market Report, global oil demand is expected to rise by around 710,000 barrels per day (bpd) this year to 103.84 million bpd, compared with an estimated 740,000 bpd increase in the previous report.
The slowdown in consumption growth is mainly attributed to challenging macroeconomic conditions and the accelerating electrification of transportation.
Global demand is projected to grow by a further 700,000 bpd by 2026, reaching 104.54 million bpd.
On the supply side, global oil output rose by 760,000 bpd in September to reach 108 million bpd, led by a 1 million bpd increase from the OPEC+ alliance, driven primarily by Middle Eastern producers.
Global oil supply is forecast to expand by 3 million bpd this year to 106.1 million bpd, followed by a 2.4 million bpd increase next year. Under the current production pact, OPEC+ members are expected to boost output by 1.4 million bpd this year and 1.2 million bpd in 2026.
On the other hand, developments pointing to a possible rekindling of tariff tensions between the US and China remain in investors' focus.
US President Donald Trump on Tuesday accused China of "purposefully" avoiding purchases of American soybeans and threatened to end trade on cooking oil and other goods in retaliation.
"I believe that China purposefully not buying our soybeans, and causing difficulty for our soybean farmers, is an economically hostile act," Trump wrote on his social media company Truth Social.
He said Washington weighing termination of business with Beijing over cooking oil and "other elements of trade, as retribution."
"As an example, we can easily produce cooking oil ourselves, we don't need to purchase it from China," he said.
Last week, Trump threatened a 100% tariff on China after Beijing restricted exports of rare earth materials, before later seeking to ease tensions, saying on his social media platform Truth Social, "Don't worry about China, it will all be fine."
Despite conciliatory remarks, uncertainty over the course of trade talks between the two largest economies continues to underpin demand concerns, adding downward pressure on prices.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
