Oil prices fell around one per cent on Monday as investors weighed the risk of a potential global glut, with US-China trade tensions adding to concerns about an economic slowdown and weaker energy demand.
Brent crude futures were down 57 cents, or 0.93 per cent, at $60.72 a barrel as of 11:25 EDT (15:25 GMT), while US West Texas Intermediate futures fell 42 cents, or 0.73 per cent, to $57.12.
Both benchmarks fell by more than $1 earlier in the session.
Oil traders’ concerns have shifted from under-supply to over-supply, as shown by the futures contract structure of the global benchmark Brent.
The six-month spread for Brent and US crude futures both show contracts for earlier loading trading below those for later loading — a structure known as contango — which encourages traders to store oil for sale at higher prices later, when supplies are expected to have shrunk.
The Brent contango, which emerged on Thursday for the first time since a brief appearance in May, was trading at its widest since December 2023. The US crude futures contango also emerged on Friday for the first time since January 2024.
“These glut fears are now descending onto the market, particularly looking forward into 2026. We will start to see floating storage pick up and inland tanks get filled,” said John Kilduff, partner with Again Capital.
“This is a real bearish narrative that we have not seen in some time,” Kilduff added.
Both benchmarks declined by more than two per cent last week, marking their third consecutive weekly drop, partly due to the International Energy Agency’s outlook for a growing supply glut in 2026.
Last week, the head of the World Trade Organisation said she had urged the United States and China to de-escalate trade tensions, warning that a decoupling by the world’s two largest economies could reduce global economic output by seven per cent over the longer term.
The two top oil consumers have recently renewed their trade war, imposing additional port fees on ships carrying cargo between them — tit-for-tat moves that could disrupt global freight flows.
Uncertainty also remains over Russian oil supply, with US President Donald Trump warning again on Sunday that Washington would maintain “massive” tariffs on India unless it stopped buying Russian oil.
On the supply side, US energy firms last week added rigs for the first time in three weeks, energy services firm Baker Hughes said.
(Additional reporting by Shadia Nasralla, Ahmad Ghaddar in London, Yuka Obayashi in Tokyo and Colleen Howe in Beijing; Editing by Emelia Sithole-Matarise and Louise Heavens)
