WTI Oil Price Struggles Below $61 Amid Global Oversupply Concerns

WTI Falls to Near $61.00, Weekly Gains Capped by Global Oversupply Concerns

West Texas Intermediate (WTI) oil prices continued their three-session losing streak, trading around $61.10 per barrel during the early European hours on Friday. Despite this decline, WTI is set to register a modest weekly increase, driven by renewed optimism over the US-China trade agreement, which alleviated concerns over global oil demand.

Earlier this week, the US and China reached a preliminary trade agreement in which the US will reduce tariffs on Chinese imports from 145% to 30%, and China will lower tariffs on US imports from 125% to 10%. This agreement brought some relief to the market, particularly with regard to demand concerns from the world’s two largest oil consumers.

However, upside momentum in oil prices has been limited by fears of oversupply. A potential US-Iran nuclear deal could lead to a lifting of sanctions, allowing Iran to increase oil production by up to 400,000 barrels per day, which would further add to global supply. This news has weighed on oil prices as the market anticipates the impact of additional supply.

Moreover, US government data showed a surprise rise in crude oil stocks, while the International Energy Agency (IEA) also raised its global supply estimate by 380,000 barrels per day, citing increased output from Saudi Arabia and other OPEC+ producers as they unwind production cuts.

With global supply concerns continuing to pressure the market, WTI oil's upward potential remains capped, despite some optimism stemming from improved trade relations between the US and China.