- 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.
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