Oil Prices Drop for Two Consecutive Days, Hitting a Five-Month Low
International crude oil prices have continued to decline this week. On Wednesday, Brent crude futures fell 0.8%, closing at $61.91 per barrel, while US WTI crude futures dropped 0.7%, settling at $58.27 per barrel. Both major benchmark crude prices have hit their lowest closing levels since May 7 for two consecutive days, indicating growing market concerns over the global energy demand outlook.
Market analysts have pointed out that the combined effect of escalating trade tensions and increased production from oil-producing countries is the main force suppressing oil prices. The International Energy Agency (IEA) has released a new report predicting a potential surplus of four million barrels per day in the global oil market by 2025, exceeding previous expectations.
Trade Tensions Rise, Global Shipping Under Threat
Recently, tensions have reignited between the US and its major trading partners. The two major oil-consuming nations are pressuring each other over port fees, increasing uncertainty in the shipping market. Analysts worry that this "tit-for-tat" policy poses a potential threat to global freight transport, possibly disrupting the normal operation of the crude oil supply chain.
A recent report by Bank of America warns that if trade tensions escalate further and OPEC+ maintains or increases its production plan, Brent crude prices may fall below the $50 per barrel mark. This expectation highlights the fragility of market confidence and reflects the long-term pressure that slowing economic growth poses on energy demand.
Federal Reserve Signals Easing, Economic Concerns Deepen
Against the backdrop of falling energy prices, Federal Reserve officials have also expressed concerns about the macroeconomic outlook. Board member Stephen Miran noted that the re-ignited trade tensions have become a "substantial downside risk," increasing the urgency for interest rate cuts. He stated that a more accommodative monetary policy could help stabilize the economy and potentially boost oil demand in the medium to long term.
The market currently broadly anticipates that the Federal Reserve will cut interest rates again at its October meeting to address dual pressures from rising external risks and slowing domestic demand. Investors are shifting their focus to Chairman Powell's public speech this week, hoping to gain clear signals on the future policy path.
The Dual Dilemma of Weak Demand and Expanded Production
The International Energy Agency noted in its monthly report released on Tuesday that OPEC+ member countries and other major oil-producing nations are steadily increasing their production, yet global demand remains weak. The report forecasts that the global oil market will face a surplus of up to four million barrels per day by 2025, far exceeding the previous estimate of 2.5 million barrels.
Analysts believe this situation reflects the reality of weakened global economic growth momentum and also exposes the difficulty oil-producing nations face in balancing the market. Besides the Middle East, Russia and US shale oil producers are also maintaining high production levels, further expanding the risk of excess supply.
Limited Support from Consumer Data, Investor Confidence Under Pressure
According to the latest data from the Chicago Federal Reserve, US retail sales in September, excluding autos and parts, increased, but some of the increase was primarily due to rising prices rather than actual consumption expansion. Economists point out that inflationary pressures and slowing job growth are weakening consumer confidence, which may drag on energy consumption.
