Oil prices fell on Wednesday due to the International Energy Agency’s warning of a supply surplus in 2026 and U.S.-China trade tensions. Brent crude futures dropped to $62.18 a barrel, while U.S. West Texas Intermediate futures fell to $58.54 a barrel, hitting five-month lows.

The International Energy Agency predicts a potential surplus of 4 million barrels per day in 2026, as OPEC+ producers and rivals increase output amid weak demand. Analysts highlight excess supply concerns and trade tensions impacting prices negatively.

U.S.-China trade tensions escalate as both countries impose additional port fees, disrupting freight flows and economic output. President Trump threatens to raise tariffs to 100%, while China expands rare earth export controls, heightening global economic uncertainty.

Analysts emphasize the importance of monitoring U.S. demand and global inventories to gauge oil price movements. Traders await weekly inventory data, with expectations of rising crude inventories but falling gasoline and distillate inventories. Industry reports from API and EIA will provide further insights.

Read more at Yahoo Finance: Oil down as market eyes excess supply, US-China trade tensions