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(Reuters) – Oil prices rose on Tuesday after a fall in the previous session as traders navigated concerns over an oversupplied market along with the trade dispute between the U.S. and China, the world’s top two oil consumers.
Brent crude futures were up 52 cents, or 0.84%, at $61.52 a barrel at 1019 GMT. The U.S. West Texas Intermediate crude (WTI) contract for November delivery , set to expire on Tuesday, rose 53 cents or 0.9% to $58.05. The more active December contract was up 0.9% or by 52 cents to $57.54.
Prices declined to their lowest since early May on Monday on the concerns around oversupply and slowing economic growth resulting from the recent escalations in the U.S.-China trade dispute.
“Speculative bets on lower prices are likely to persist as long as Brent remains below $65,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Both WTI and Brent have shifted to contango market structures, where prices for immediate supply are lower than for later delivery and which typically indicate that near-term supply is abundant and demand is declining.
On the physical market, cargoes were going unsold and discounting was spreading across West African grades with a large surplus still expected to come, Rystad’s vice president of oil markets Janiv Shah said.
Crude prices have fallen from late last month as the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, pushed ahead with plans to add more oil to the market.
This has led analysts to predict a surplus of crude this year and next, with the International Energy Agency last week projecting a global surplus of nearly 4 million barrels per day in 2026.
Some analysts however note that concerns over an oil glut were overblown just yet.
The IEA’s forecast for a massive surplus would lead to a strongly upward-sloped futures curve, called super contango, but the futures curve structure does not show such it at present, Giovanni Staunovo, an analyst at UBS, said in a note.
Meanwhile, preliminary Reuters poll on Monday showed that U.S. crude oil stockpiles likely rose last week, ahead of weekly reports from the American Petroleum Institute and the EIA. For the week ending October 10, crude builds were more than expected while gasoline and diesel stocks drew more than forecast.
“We’re not in a crisis of excess. Distillates just drew, and any geopolitical surprises can still spark sharp counter-moves in short term, but the prevailing bias is downside unless OPEC+ slows the unwind or macro surprises on the upside,” said analyst Ole Svalbye of SEB Bank.
Additionally, if the U.S. and China reach a broader agreement in their trade dispute, that could provide a boost, or at least a floor, for prices. Investors are pinning their hopes on a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping next week in South Korea but disputes over tariffs, technology, and market access remain unresolved.
Reporting by Sam Li in Beijing, Ashitha Shivaprasad in Bengaluru; Editing by Emelia Sithole-Matarise and Louise Heavens
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