- West Texas Intermediate oil dropped below $55 a barrel for the first time since February 2021
- Brent crude fell below $60 a barrel, hitting its lowest since May
- OPEC+ supply surge and weak demand growth are causing a market surplus
West Texas Intermediate oil fell below $55 a barrel for the first time since February 2021, the latest sign that crude supplies are outpacing demand as the market braces for a large surplus.
Earlier in the session, global benchmark Brent fell below $60 a barrel for the first time since May.
Expectations of a surplus, driven by a wave of new supply from the OPEC+ alliance and countries in the Americas, as well as subdued demand growth, drove prices down this year. In recent days, fresh hopes for a deal to end Russia's war in Ukraine chipped away at a longstanding geopolitical premium on crude.
At the same time, signs of weakness are mounting across the oil market, with Middle Eastern prices entering a bearish contango pattern early on Tuesday. Elevated premiums for fuels like gasoline and diesel relative to crude, which supported prices last month, have also eased.
Oil Outlook Darkens As JPMorgan Warns Brent May Sink To $30 By 2027
