WTI Oil drops to the $58.00 area as global trade fears resurface

• Oil prices have lost more than $1 so far on Monday, dropping to levels near $58.00

• News that the US and China are raising taxes on cargo vessels has renewed concerns about a trade war.

• The prospects of restricted trade and higher Crude output keep fears of an Oil glut alive.

The US benchmark West Texas Intermediate Oil has lost nearly $1 per barrel on Tuesday, retreating to levels near $58.00, right above the five-month lows of $57.90 hit last week, hammered by growing trade tensions between the US and China.

The world’s two major economies have opened a new front in their trade feud, announcing higher fees on cargo ships, which will take effect from today.

This news has taken markets by surprise, crushing hopes of a de-escalation of tensions. The US Treasury's Scott Bessent had soothed traders on Monday, announcing that US President Trump will meet Xi Jinping in late October.

Trump himself had eased his tone towards China after threatening 100% tariffs on Friday. Beijing, however, has remained firm, accusing the US of “double standards” with China, while the commerce ministry warned that the US cannot seek dialogue while threatening new measures.

Meanwhile, Crude producers are planning to hike output by 137,000 additional barrels per day in November. This is a more moderate increase than expected, yet it keeps fears of an Oil glut alive as trade uncertainty remains high, and most of the world’s leading economies are stuttering.