FX.co ★ Oil Slips on Glut Outlook, Trade Jitters

West Texas Intermediate (WTI) crude oil futures continued their recent decline, edging closer to $58 per barrel on Wednesday. This value is near its lowest point since May, primarily due to forecasts of a global oversupply and apprehensions about the economic repercussions of the ongoing trade tensions between the US and China. The International Energy Agency has issued a warning that the oil market might encounter an unprecedented surplus next year, with supply anticipated to surpass demand by almost 4 million barrels per day. This glut is larger than previously predicted. The agency attributes the impending oversupply to increased production from OPEC+ and other producers, amidst consistently weak consumption levels. Concurrently, the US and China have escalated their trade disputes, raising concerns that this continuous exchange of retaliations between the two major economies could further dampen global consumption. Investors are now looking forward to the release of weekly inventory data to gain additional insights into demand trends.