Oil prices slipped in Asian trade on Tuesday, hovering near five-month lows as concerns about a global supply glut and weakening demand weighed heavily on market sentiment. The easing of geopolitical tensions in the Middle East and lower expectations of new U.S. sanctions on Russia further reduced risk premiums that had previously supported crude prices.
Brent crude futures for December dropped to $61.00 per barrel, while West Texas Intermediate (WTI) crude fell 0.1% to $57.45 per barrel by 20:29 ET (00:29 GMT). Both benchmarks extended their three-week losing streak, reflecting persistent market worries about oversupply and slowing global energy consumption.
Data from analytics firm Vortexa revealed that over 1.2 billion barrels of crude are currently in transit, signaling an excess of oil supply. This surge stems from increased output by the Organization of Petroleum Exporting Countries and its allies (OPEC+), which have been steadily unwinding production cuts implemented over the past two years. Rising exports from the Americas, particularly the U.S. and Brazil, have further expanded global supply levels, following U.S. President Donald Trump’s push for higher domestic energy output and lower fuel prices.
Geopolitical developments also contributed to market pressure. A U.S.-brokered ceasefire between Israel and Hamas appeared to be holding after a weekend of violence that left nearly 40 dead, leading traders to discount risks of further disruptions in Middle Eastern oil supply. Meanwhile, reports suggesting Trump urged Ukrainian President Volodymyr Zelensky to concede territory to Russia reduced expectations of tougher sanctions on Moscow’s energy exports.
Analysts at ANZ noted that Trump’s shifting stance on the Russia-Ukraine conflict has lowered the likelihood of new restrictions on Russian oil, keeping its exports steady and intensifying global oversupply concerns.