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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.25 during the early European trading hours on Wednesday. The WTI remains on the defensive as trade tensions persist between the US and China and as the International Energy Agency (IEA) warns of a huge supply glut in 2026. Traders brace for the American Petroleum Institute (API) weekly crude oil stock report later on Wednesday. 

Escalating trade tensions between the United States (US) and China, the world's two largest oil consumers, could curtail demand and weigh on the WTI price. Both countries will impose additional port fees on ships carrying cargo between them. This measure will likely raise trading costs and disrupt freight flows. The US is scheduled to start collecting fees on October 14.

"The focus will remain on the recent re-escalation in trade tensions between the US and China and the risks it brings to the global economy," said Tony Sycamore, a market analyst at IG.

The IEA said on Tuesday the global oil market could face a surplus of global oil supply growth next year of as much as 4 million barrels per day (bpd), a bigger glut than it earlier estimated, as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) raise output and demand remains sluggish.

On the other hand, the downside for the black gold might be limited, as concerns over the ongoing war in Ukraine could lead to additional sanctions on Russian energy exports, reducing global oil supplies. US President Donald Trump said that he is considering sending long-range Tomahawk cruise missiles to Ukraine, per the BBC. 

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