Oil prices dipped on Monday, pressured by worries over a global glut as U.S.-China trade tensions added to concerns about an economic slowdown and weaker energy demand.

Brent crude futures were down 18 cents, or 0.3%, at $61.11 a barrel as of 0938 GMT, while U.S. West Texas Intermediate futures fell 17 cents, or 0.3%, to $57.37.

Oil traders' concerns have shifted from under-supply to over-supply, the futures contract structure of the global benchmark Brent showed.

The six-month spread for Brent shows contracts for earlier loading are trading below those for later loading, a structure known as contango, which encourages traders to pay for storing oil so it can be sold at higher prices when supplies are expected to have shrunk.

Contango, which emerged on Thursday for the first time since a brief appearance in May, has deepened to around minus 30 cents, a level last seen in late 2023.

Narrowing backwardation, the market term for immediate deliveries fetching a premium over later deliveries, suggests investors are making less money selling their oil in the spot market because near-term supply is perceived to be ample.

Both benchmarks declined more than 2% last week, marking their third consecutive weekly decline, partly due to the International Energy Agency's outlook for a growing supply glut in 2026.

Last week, the head of the World Trade Organization said she had urged the United States 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% 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

Uncertainty remains over what may happen with Russian oil supply, with U.S. President Donald Trump warning again on Sunday that Washington would maintain "massive" tariffs on India unless it stopped buying Russian oil.

On the supply side, U.S. energy firms last week added rigs for the first time in three weeks, energy services firm Baker Hughes said.

Source: Investing.com