Global oil prices dropped on Monday to extend losses from the previous week as concerns over oversupply and renewed trade tensions between the United States and China weighed on market sentiment.
Brent crude oil, against which Nigerian crude oil is priced, fell by $0.53 or 0.86% to $60.76 a barrel, while U.S. West Texas Intermediate (WTI) declined by $0.55 or 0.96% to $56.99 per barrel.
The International Energy Agency’s recent forecast for a growing supply surplus in 2026 has heightened concerns that rising production from major oil-producing nations could outpace demand in the medium term.
Analysts say traders are becoming increasingly cautious as macroeconomic indicators continue to point to weakening consumption patterns, particularly in Asia.
Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that the combination of higher production levels and renewed trade frictions between Washington and Beijing has fuelled selling pressure across the oil market.
China’s latest economic data showed third-quarter growth slowing to its weakest pace in a year amid subdued domestic consumption and export challenges linked to trade disputes.
The World Trade Organization recently warned that a prolonged decoupling between the world’s two largest economies could trim global output by up to 7% over time.
The geopolitical backdrop remains volatile. The United States and China have reintroduced port fees on cargo vessels trading between their ports, escalating costs and potentially disrupting global shipping routes.
Meanwhile, Washington continues to pressure India and other Asian buyers to cut oil imports from Russia, a move that could realign regional trade flows and affect supply balances.
U.S. President Donald Trump reiterated on Sunday that the U.S. would maintain “massive” tariffs on India if it continues purchasing Russian crude.
He and Russian President Vladimir Putin are expected to meet again to discuss the ongoing war in Ukraine. Despite Washington’s efforts to isolate Moscow, Russia continues to find buyers in Asia, with China expected to benefit from discounted Russian oil if India faces sanctions-related constraints by December.
On the supply side, data from energy services firm Baker Hughes indicated that U.S. energy firms added oil and gas rigs for the first time in three weeks, suggesting a modest recovery in domestic drilling activity.
This development reinforces the narrative of rising supply at a time when global demand is under pressure from slower economic growth and trade friction.
Analysts expect oil markets to remain volatile in the coming weeks as traders balance short-term supply gains against long-term concerns about demand recovery. With China’s economic slowdown, rising U.S. output, and persistent geopolitical uncertainty, sentiment in the global oil market remains firmly bearish.
