Oil prices slip on concerns over US-China trade tensions

Oil prices dipped on Monday, pressured by worries over a global glut as escalating US-China trade tensions added to concerns about an economic slowdown and weaker energy demand. Brent crude futures fell 24 cents, or 0.4 per cent, at $61.05 a barrel at 0032 GMT, while US West Texas Intermediate futures were down 21 cents, or 0.4 per cent, at $57.33, erasing gains from Friday. Both benchmarks declined more than 2 per cent last week, marking their third consecutive weekly decline, partly due to the International Energy Agency's outlook for a growing supply glut in 2026. "Concerns about oversupply from increased production by oil- producing nations, coupled with fears of an economic slowdown stemming from escalating US-China trade tensions, are fuelling selling pressure," said Toshitaka Tazawa, an analyst at Fujitomi Securities. "While the US is stepping up pressure on buyers of Russian crude, the upcoming summit between US President Donald Trump and Russian President Vladimir Putin adds uncertainty to the outlook, making it difficult for some investors to adjust their positions," he said. Last week, the head of the World Trade Organization said she had urged the US and China to de-escalate trade tensions, warning that a decoupling by the world's two largest economies could reduce global economic output by 7 per cent over the longer term. The two top oil consumers have recently renewed their trade war, imposing additional port fees on ships carrying cargo between them - tit-for-tat moves that could disrupt global freight flows. Meanwhile, Trump and Putin agreed on Thursday to hold another summit on the war in Ukraine, even as Washington pressured India and China to stop buying Russian oil. Following talks with Ukrainian President Volodymyr Zelenskiy at the White House on Friday, Trump implored both Ukraine and Russia to "stop the war immediately," even if it means Ukraine conceding territory. US and European pressure on Asian buyers of Russian energy could restrict India's oil imports from December, leading to cheaper supplies for China, trade sources and analysts said. On the supply side, US energy firms last week added oil and natural gas rigs for the first time in three weeks, energy services firm Baker Hughes said in its closely followed report on Friday.