Oil prices fall for second consecutive day amid oversupply fears
Kyiv • UNN
Brent and WTI crude futures fell amid oversupply concerns and demand risks. Analysts predict an oil surplus until 2026, which could lead to further price declines.
Oil prices fell for a second consecutive day on Tuesday amid fears of oversupply and demand risks associated with tensions between the United States and China, the world's two largest oil consumers, putting pressure on the market, UNN reports with reference to Reuters.
Details
Brent crude futures fell 17 cents, or 0.28%, to $60.84 a barrel at 03:43 GMT (06:43 Kyiv time). The November contract for US West Texas Intermediate (WTI) crude, which expires on Tuesday, fell 0.52% to $57.22. The more active December contract fell 19 cents, or 0.33%, to $56.83.
On Monday, prices fell to their lowest level since early May amid fears of slowing economic growth due to the recent escalation of the trade dispute between the United States and China.
Both WTI and Brent have moved into a contango market structure, where short-term delivery prices are lower than later delivery prices, which usually indicates oversupply in the short term and weakening demand.
Prices fell sharply after OPEC+ moved forward with plans to increase oil supplies to the market. This prompted analysts to predict an oil surplus this year and next. The International Energy Agency last week forecast a global surplus of almost 4 million barrels per day in 2026.
The ongoing weakening of the Brent crude monthly spread structure indicates that the pressure caused by oversupply in the crude oil market is gradually materializing. This will weaken market expectations and reduce investors' willingness to chase profits, limiting the upside potential for oil prices.
The current pessimistic outlook for oil is likely to persist into 2026. Goldman Sachs analysts said on Tuesday that they forecast Brent crude could fall to $52 a barrel by the fourth quarter of next year.
Goldman analysts attributed last week's drop in Brent crude prices to signs that "the long-awaited global surplus has begun to materialize," citing satellite data on global oil inventories and IEA and US Energy Information Administration data on oil inventories.
A preliminary Reuters poll conducted on Monday showed that US crude inventories likely rose last week, ahead of weekly reports from the American Petroleum Institute and the US Energy Information Administration.
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