WTI at $58 as Oil Stays Weak on Supply, Trade Woes

SECAUCUS, NJ (DTN) – Oil futures fell in sluggish trade for a second straight day on Wednesday (10/15) as an intensifying U.S.-China trade battle and fears of oversupply continued to weigh on key crude benchmarks.

U.S. Trade Representative Jamieson Greer labeled China’s recent restrictions on rare earths exports as a “global supply chain power grab'”.

Bank of America, meanwhile, cautioned that Brent could slip beneath $50 bbl if U.S.-China trade tensions worsened and OPEC+ production continued to ramp up.

NYMEX-traded WTI crude for November delivery settled down by $0.43 at $58.27 bbl, while ICE Brent for December delivery dipped by $0.35 to $62.04 bbl.

In the downstream sector, gasoline prices bucked the lower trend, with November RBOB gasoline climbing by $0.0096 to $1.8382 gallon.

Front-month ULSD futures gave back gains from earlier in the day, falling by $0.0186 to trade at $2.1790 gallon.

The U.S. dollar index softened by 0.270 points to 98.54 against a basket of foreign currencies.

Market participants are awaiting the delayed publication of the Energy Information Administration’s Weekly Petroleum Status Report on Thursday (10/16), due to the Columbus Day federal holiday on Monday (10/13).

The American Petroleum Institute will issue later today its own weekly oil supply-demand data, also delayed for a day by to the holiday.

Since recovering briefly from the five-month lows of last week, WTI and Brent have been trading weakly and in a tight range on persistent worries of oversupply.

The International Energy Administration warned on Tuesday that the global oil market could be in a record glut of 4 million by next year as producer alliance OPEC+ continues to pump more than needed while and demand remains sluggish.

The trade dispute between the United States and China — the world’s two largest oil consumers –- is, meanwhile, threatening to disrupt global freight flows after both nations imposed additional port fees on ships carrying cargo between them.