Oil Swings as Trade War Tumult Cements Expectations of Surplus
Source: Live Mint
Oil swung between gains and losses as traders monitored the latest US moves in the tariff war amid mounting consensus the market will experience a persistent surplus.
West Texas Intermediate futures fluctuated below $62 a barrel. US equities stabilized on Tuesday as a rally in big banks tempered fears of an intensifying trade war between the US and China. The IEA slashed its forecasts for oil demand this year by almost a third and predicted the oversupply will extend into 2026.
Oil has dropped about $10 this month as the trade fight started by President Donald Trump stoked fears of a global recession that would hurt energy demand, especially in the US and China, the biggest crude consumers. In another front of the trade war, the European Union and US made little progress during trade talks this week, and Trump’s administration indicated that most of the tariffs imposed on the bloc will remain.
Concerns around the growth outlook have led agencies to cut projections for oil usage and analysts to slash price forecasts, with the possibility of a glut amplified by OPEC ’s surprise decision to bring back output more quickly than expected.
The Organization of the Petroleum Exporting Countries already trimmed its outlook for consumption over the next two years by about 100,000 barrels a day, following a larger cut by the US Energy Information Administration last week. Energy Aspects Ltd. cut its annual oil-price forecast by $10 a barrel, saying a global recession is now all but certain.
“The 2025 oil market surplus is increasing,” HSBC Holdings Plc analysts including Kim Fustier wrote in a note. “The combination of weaker demand and accelerated output increases from OPEC suggests a larger 2025 surplus than we were forecasting a few months ago.”
To get Bloomberg’s Energy Daily newsletter in your inbox, click here.
This article was generated from an automated news agency feed without modifications to text.
