Oil Steadies as Narrowing Spreads Point to Softer Conditions

(Bloomberg) — Oil steadied as traders tracked softening market metrics and waited for reports that may give clues about an impending global surplus.

Brent was near $64 a barrel after a small gain on Monday, while the West Texas Intermediate was below $60. WTI’s prompt spread — the gap between its two nearest contracts — has narrowed to 9 cents a barrel in backwardation. That’s the lowest since February, and suggests less-tight conditions.

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OPEC — which has been boosting supply— is due to release its monthly market analysis on Wednesday, with the International Energy Agency issuing an annual outlook the same day. The IEA has already forecast a record annual glut for 2026, and will update its view in a monthly snapshot on Thursday.

US oil futures have shed about 16% this year after posting losses for the past three months. The prolonged slump has been driven by widespread expectations for a global surplus, with OPEC and its allies loosening output curbs just as drillers from outside the alliance also add barrels.

Indian imports were also in focus. US President Donald Trump said Washington was getting “pretty close” to a trade deal with New Delhi, and the country had “stopped doing the Russian oil.” Trump has pushed India to curb crude-buying from Moscow as part of efforts to end the war in Ukraine.

The US has also sanctioned Russian energy giants Lukoil PJSC and Rosneft PJSC. Lukoil has declared force majeure on oil shipments from its giant West Qurna 2 field in Iraq, according to a person with knowledge of the matter.

Trading volumes may be lower than usual on Tuesday as it a federal holiday in the US.

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