Global crude prices dip on renewed fears of oversupply

Global oil prices slipped slightly in early Asian trading on Tuesday as investors weighed signs of a possible end to the US government shutdown against growing concerns about excess supply in the market.

Brent crude futures edged down by 13 cents to trade at $63.93 a barrel around 0100 GMT, while US West Texas Intermediate (WTI) crude fell by the same margin to reach $60. Both contracts had gained roughly 40 cents in the previous session.

Oversupply clouds market outlook

Analysts said that while optimism about the US political stalemate easing gave markets some support, the persistent imbalance between supply and demand continued to pressure oil prices.

Energy consultancy Ritterbusch and Associates noted that rising OPEC output and weak consumption trends were creating a more bearish outlook for the months ahead. “Global oil balances are turning increasingly negative as demand growth slows and OPEC production grinds higher,” the firm said.

Earlier this month, the OPEC+ alliance decided to raise its December production target by 137,000 barrels per day, maintaining the same increase seen in October and November. The group also signalled it would pause further output hikes during the first quarter of next year to stabilise the market.

Sanctions shake Russian oil operations

Meanwhile, geopolitical tensions added fresh uncertainty. New US sanctions on Russian energy companies Rosneft and Lukoil have begun to disrupt global oil flows. Sources quoted by Reuters said Lukoil had declared force majeure at its West Qurna-2 field in Iraq after sanctions made operations difficult. Bulgaria was also reportedly preparing to seize the company’s Burgas refinery.

These developments marked the most significant fallout yet from the restrictions announced last month by President Donald Trump, intensifying the strain on Moscow’s overseas oil business.

In Asia, the volume of crude stored on tankers has reportedly doubled in recent weeks as sanctions curtailed Russian shipments to China and India. Import limits and cautious buying by independent Chinese refiners further reduced regional demand, forcing some to turn to Middle Eastern suppliers instead.

Ritterbusch analysts added that the direction of prices may depend partly on whether China continues stockpiling discounted Russian oil and how India responds to Washington’s pressure to scale back purchases.

Despite the modest dip, traders said the market remained sensitive to both political and supply-side developments, suggesting that volatility could persist in the near term.