Rising US Oil Stockpiles and OPEC Changes Impact Oil Prices fell on
Rising US Oil Stockpiles and OPEC Changes Impact Oil Prices fell on Thursday, extending their decline from the previous session, after a report showed rising US crude stockpiles. This data reinforced concerns that global supply may be more than sufficient to meet current fuel demand. Brent crude fell 9 cents, or 0.1%, to $62.62 a barrel, after earlier falling 3.8%. Meanwhile, West Texas Intermediate (WTI) fell 11 cents, or 0.2%, to $58.38 a barrel, extending Wednesday's 4.2% decline.
A report from the American Petroleum Institute (API) showed that US crude oil stocks rose by 1.3 million barrels in the week ending November 7, despite declines in gasoline and distillate stocks. The more than $2 per barrel drop in oil prices on Wednesday was triggered by a change in OPEC's projections, which now expect global oil supply to slightly exceed demand in 2026, in contrast to previous projections that indicated a supply deficit.
OPEC says this supply surplus is due to increased production from OPEC+—a producer group that includes OPEC members and allies like Russia. Analysts, such as Suvro Sarkar of DBS Bank, say the current price decline is driven by a more realistic revision of OPEC's projections, but it doesn't change the fundamentals of the oil market, making the market reaction seem overblown.
Despite the downward pressure on oil prices, some analysts expect prices to remain stable around $60 per barrel, especially given the potential for temporary disruptions to Russian exports following the imposition of tighter sanctions. Furthermore, a report from the U.S. Energy Information Administration (EIA), expected to be released on Thursday, reveals that U.S. oil production is expected to hit a record high, adding to pressure on oil prices. (asd)
Source: Bloomberg
