Oil prices settled at their lowest since early May on Monday as investors weighed a potential global glut, with US-China trade tensions adding to concerns about an economic slowdown and weaker energy demand.

Brent crude futures settled down 28 cents, or 0.46 percent, at US$61.01 a barrel.

US West Texas Intermediate futures settled down two cents, or 0.03 percent, to US$57.52.

Both benchmarks fell more than US$1 earlier in the session, and both closed at their weakest levels since early May.

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

"These glut fears are now descending onto the market, particularly looking forward into 2026. We will start to see floating storage pick up and inland tanks get filled," said John Kilduff, partner with Again Capital.

"This is a real bearish narrative that we have not seen in some time," Kilduff added.

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

Both futures contracts spent much of the year in the opposite structure, called backwardation, where the futures price is lower than the current spot price.

This typically occurs when there's high demand for the commodity in the present, often due to short-term supply constraints or urgent need reflecting a situation where buyers are willing to pay a premium for immediate delivery rather than waiting for a future delivery date. (Reuters)