Oil prices extended their decline in Asian trading on Monday, pressured by weak demand outlooks and expectations of an oversupplied market. Despite geopolitical tensions in the Middle East, both Brent and West Texas Intermediate (WTI) crude futures remained near five-month lows.
Brent crude for December delivery slipped 0.3% to $61.11 per barrel, while WTI fell 0.4% to $57.33 per barrel by 20:40 ET (00:40 GMT). Both benchmarks dropped over 2% last week, reflecting continued market pessimism over global energy demand.
Although hostilities flared between Israel and Hamas over the weekend, oil prices saw limited upside. Israel confirmed the resumption of a U.S.-brokered ceasefire in Gaza after retaliatory attacks left two Israeli soldiers and nearly 30 Palestinians dead. The truce, originally agreed upon in early October, had already dampened oil’s risk premium by reducing fears of broader regional disruption.
Investor focus also shifted to U.S. diplomatic efforts to mediate ceasefires between Russia and Ukraine, and renewed trade tensions between Washington and Beijing. These global uncertainties have compounded existing worries about slowing consumption and growing inventories.
The International Energy Agency (IEA) recently issued a bearish outlook, warning that consistent production hikes by OPEC and its allies could trigger a supply overhang as early as 2026. Meanwhile, sluggish economic data from top oil importer China, including the upcoming third-quarter GDP report, added to fears of softening demand.
In the U.S., the ongoing government shutdown has delayed key economic data releases and weighed on local fuel demand. Despite occasional support from conciliatory U.S.-China statements, traders remain cautious as rising output and weakening consumption threaten to deepen the oil market’s downturn.