LONDON, Oct 21 — 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 United States (US) and China, the world's top two oil consumers.
Brent crude futures were up 52 cents, or 0.84 per cent, at US$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 per cent to US$58.05. The more active December contract was up 0.9 per cent or by 52 cents to US$57.54.
Prices declined to their lowest since early May on Monday, reflecting concerns about oversupply and slowing economic growth resulting from the recent escalations in the US-China trade dispute.
"Speculative bets on lower prices are likely to persist as long as Brent remains below US$65," said Saxo Bank commodity strategy head Ole Hansen.
Both WTI and Brent have shifted to contango market structures, where prices for immediate supply are lower than for later delivery. This typically indicates that near-term supply is abundant and demand is declining.
On the physical market, Rystad's oil markets vice president Janiv Shah said that cargoes were going unsold, discounting was spreading across West African grades, and a large surplus was still expected.
Crude prices have fallen from late last month as the Organisation 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 crude surplus this year and next. Last week, the International Energy Agency projected a global surplus of nearly four million barrels per day in 2026.
However, some analysts note that concerns over an oil glut were overblown just yet.
In a note, UBS Giovanni Staunovo said that 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 currently show this.
Meanwhile, a preliminary Reuters poll on Monday showed that US 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 are not in a crisis of excess. Distillates just drew, and any geopolitical surprises can still spark sharp counter-moves in the short term, but the prevailing bias is downside unless OPEC+ slows the unwind or macro surprises on the upside," said SEB Bank analyst Ole Svalbye.
Additionally, if the US and China reach a broader agreement in their trade dispute, that could boost prices or at least provide a floor.
Investors are pinning their hopes on a meeting between US President Donald Trump and Chinese President Xi Jinping, which is expected to take place next week in South Korea. However, disputes over tariffs, technology, and market access remain unresolved.
