WTI remains subdued near $58.00 due to Oil oversupply outlook, US-China trade tensions

• WTI depreciated as the International Energy Agency reported that the global Oil market could face a surplus in 2026.
• Oil prices came under pressure amid renewed United States-China trade tensions.
• Crude Oil prices may receive support from growing expectations of further Fed rate cuts in 2025.

West Texas Intermediate (WTI) Oil price moves little after registering more than 1.5% losses in the previous session, trading around $58.10 during the Asian hours on Wednesday. Crude Oil prices declined as the International Energy Agency (IEA) warned of an Oil supply surplus in 2026.

On Tuesday, the IEA reported that the global oil market could face a surplus of up to 4 million barrels per day next year, a larger glut than previously anticipated, as OPEC+ members and other producers increase output while demand remains sluggish.

Additionally, Oil prices received downward pressure from renewed United States (US)-China trade tensions, raising concerns that the ongoing feud between the two biggest Oil consumers could further dampen global Oil demand.

President Donald Trump criticized China on Wednesday for its recent protectionist trade policies, threatening additional targeted trade restrictions if China proceeds with imposing new rare earth mineral export controls and increased port fees for foreign container ships in Chinese ports. Beijing also announced sanctions against five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean.

However, the downside of Oil prices could be restrained due to rising odds of further rate cuts by the Federal Reserve (Fed) in 2025. The lower borrowing cost could support the economic activities in the United States, the world's largest Oil consumer, which could support crude Oil prices.

Fed Chair Jerome Powell stated that the central bank is on track to deliver another quarter-point interest-rate reduction later this month, even as a government shutdown significantly reduces its read on the economy. Powell highlighted the low pace of hiring and noted that it may weaken further. The CME FedWatch Tool indicates that markets are now pricing in nearly a 94% chance of a Fed rate cut in October and a 93% possibility of another reduction in December.