Oil prices held losses after a third week of declines as traders weighed growing evidence that a long-awaited surplus was finally starting to emerge.

West Texas Intermediate prices fell to trade near $57 a barrel as investors repositioned ahead of this week's November contract expiration, adding to volatile trading. Floating storage rose to new highs as producing countries continued to add barrels and tankers sailed farther for deliveries, among the most visible signs of an oversupplied market.

Oil futures have fallen more than 20% from their summer highs as the Organization of the Petroleum Exporting Countries (OPEC) and its allies increased production, while major forecasters projected the supply glut would continue into next year. Nonetheless, WTI has entered oversold territory on the nine-day relative strength index for the first time since May, a possible indication that prices have fallen too quickly. It also points to a possible reversal.

"Crude oil futures continue to trade on the defensive amid the notion that a looming supply surplus is imminent," said Dennis Kissler, senior vice president for trading at BOK Financial. Price support for WTI is around $56.15, although a close below $55 risks further price declines, he added.

Geopolitical forces are also playing a role. Prices have been weighed down by limited progress toward de-escalating the war in Ukraine, a scenario that could push oil near $50 a barrel, according to Citigroup Inc. President Donald Trump said last week he would hold a second meeting with Russia's Vladimir Putin to end the conflict, though previous talks have done little to stem hostilities.

Meanwhile, China's economy slowed for the second straight quarter, hurt by reduced consumer and corporate spending, although Beijing has signaled its full-year growth goal of around 5% is still on track. The next round of talks between the world's top economy and oil consumer is set for this week, with U.S. President Donald Trump expressing optimism about a potential deal.

Other key market metrics weakened. The US benchmark December-January contract spread, for the first time since May, shifted into contango, a bearish price pattern characterized by short-term contracts trading at a discount to longer-term contracts. The spread between the two nearest December contracts shifted into a bearish contango structure in early October.

WTI for November delivery, which expires on Tuesday, fell 0.8% to $57.07 per barrel at 11:31 a.m. in New York. The more active December contract was at $56.68. Brent for December settlement fell 0.9% to $60.72 per barrel. (alg)

Source: Bloomberg