Oil prices fell on Thursday, extending losses from the previous session, after an API report showed rising US crude inventories and the OPEC report reinforced concerns that global supply is sufficient to meet current fuel demand.
Brent crude futures fell 9 cents, or 0.1%, to $62.62 a barrel at 03:36 GMT, following a 3.8% drop the previous day. WTI fell 11 cents, or 0.2%, to $58.38 a barrel, extending Wednesday’s 4.2% decline.
Market sources reported on Wednesday that US crude inventories increased by 1.3 million barrels in the week ending November 7, citing data from the American Petroleum Institute (API). Citing API data, sources indicated that gasoline and distillate stocks have fallen.
Prices fell by more than $2 per barrel on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) announced that global oil supply would slightly exceed demand in 2026. This represents a significant departure from the group’s previous forecasts.
The recent decline in prices stems from OPEC’s revision of the supply-demand balance for 2026 in its monthly report. This confirms that the group, despite initially adopting a more optimistic stance, has acknowledged the possibility of a supply glut in 2026.
This coincides with the group’s decision to pause the end of voluntary production cuts in the first quarter of 2026. Given that this is merely a transition to a more realistic market interpretation, it doesn’t change the fundamentals for now.
OPEC+ clearly expects a supply glut next year due to broader production increases.
OPEC’s signal of excess supply triggered a downward trend that had previously been suppressed in the previous session, while a rise in US crude oil inventories added to the pressure and caused oil prices to continue their decline on Thursday morning.
Following a one-day skip, the US Energy Information Administration (EIA) is expected to release inventory data later on Thursday. Other reports released on Wednesday also reinforced the bearish investor sentiment.
The EIA also stated in its Short-Term Energy Outlook that US oil production is expected to hit a record high this year, higher than previously anticipated.
The EIA added that global oil inventories will rise through 2026, with production rising faster than demand for petroleum fuels, increasing pressure on oil prices.
The IEA also predicts that demand for oil and natural gas will increase through 2050.
Some analysts are more optimistic and expect prices to remain near current levels going forward.
Considering that there may be a short-term disruption to Russian export flows, especially once tighter sanctions come into effect, a significant support to oil prices around $60 per barrel can be expected.