Oil prices fall amid concerns over global supply glut
Oil prices dropped on Tuesday as traders focused on softening market signals and awaited key reports that could offer further insight into an impending global supply surplus.
Brent crude fell below $64 per barrel after a two-day rise, while West Texas Intermediate (WTI) hovered near $60, News.Az reports, citing Bloomberg.
The WTI prompt spread — the difference between its two nearest contracts — narrowed to just 9 cents a barrel, the smallest gap since February. This backwardation shift suggests less tightness in the market.
OPEC, which has been increasing supply, is set to release its monthly market analysis on Wednesday, while the International Energy Agency (IEA) will issue its annual outlook on the same day. The IEA has already forecast a record global surplus in 2026, and will update its short-term view in a monthly report on Thursday.
US oil futures have dropped about 16% this year, continuing a slump that has stretched for three months. This decline is driven by growing expectations of a global surplus, as OPEC and its allies ease production restrictions, while producers outside the group also ramp up output.
Indian imports were also in focus. US President Donald Trump said Washington was getting “pretty close” to a trade deal with New Delhi, and the country had “stopped doing the Russian oil.” Trump has pushed India to curb crude-buying from Moscow as part of efforts to end the war in Ukraine.
The US has also sanctioned Russian energy giants Lukoil PJSC and Rosneft PJSC. Lukoil has declared force majeure on oil shipments from its giant West Qurna 2 field in Iraq, according to a person with knowledge of the matter.
Trading volumes may be subdued on Tuesday as it a federal holiday in the US.
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