Trade tensions and weak Chinese growth raise concerns over oil demand
Trump continues to pressure India to stop buying Russian oil
US drilling rig count increases for first time in three weeks
TOKYO/BEIJING, Oct 20 (Reuters) – Oil prices fell on Monday, pressured by worries about a global glut as trade tensions between the United States and China added to worries about an economic slowdown and falling energy demand.
Brent crude futures were down 53 cents, or 0.86 percent, at $60.76 a barrel by 0610 GMT, while U.S. West Texas Intermediate futures fell 55 cents, or 0.96 percent, to $56.99, erasing Friday’s gains.
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Both benchmarks fell more than 2% last week, marking their third consecutive weekly decline, partly due to the International Energy Agency’s forecast of growing oversupply in 2026.
“Concerns about oversupply due to increased production from oil-producing countries, coupled with fears of an economic slowdown resulting from escalating trade tensions between the United States and China, are fueling selling pressure,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
China’s economic growth in the third quarter slowed to its weakest pace in a year, data from the Chinese Bureau of Statistics showed on Monday. The results were hurt by weak domestic demand, raising questions about Beijing’s reliance on exports amid trade tensions with the United States.
Last week, the head of the World Trade Organization said she had urged the United States and China to ease trade tensions, warning that a decoupling of the world’s two largest economies could reduce global economic output by 7% in the long term.
The two major oil consumers recently resumed their trade war, imposing additional port fees on ships carrying goods between them – reciprocal measures that could disrupt global goods flows.
Uncertainty remains over what could happen to Russian oil supplies, with US President Donald Trump warning again on Sunday that Washington would maintain “massive” tariffs on India unless it stops buying Russian oil.
Meanwhile, Trump and Putin agreed Thursday to hold another summit on the war in Ukraine, even as Washington pressured India and China to stop buying Russian oil.
Following his talks with Ukrainian President Volodymyr Zelenskiy at the White House on Friday, Trump implored Ukraine and Russia to “end the war immediately,” even if it means Ukraine must cede territory.
U.S. and European pressure on Asian buyers of Russian energy could restrict Indian oil imports from December, leading to lower supplies for China, trade sources and analysts said.
On the supply side, U.S. energy companies added oil and gas rigs last week for the first time in three weeks, according to energy services company Baker Hughes (BKR.O).open a new tab said Friday in its closely watched report.
Reporting by Yuka Obayashi in Tokyo and Colleen Howe in Beijing; Editing by Sonali Paul
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Yuka Obayashi reports on energy, metals and other commodities in Japan.
