Oil Prices Fall Due to Rising Stocks in the U.S. and Surplus Forecasts
Global oil prices have declined following the release of data showing an increase in crude oil stocks in the U.S. This has heightened concerns about an oversupply in the market, which is currently fully meeting fuel demand.
This is reported by AgroReview
Details of Oil Price Movements
Brent crude futures remained at $62.71 per barrel after a significant drop of 3.8% the previous day. WTI prices fell by 3 cents, or 0.1%, to $58.46 per barrel, continuing a downward trend that led to a 4.2% decline in quotes on Wednesday.
According to market sources citing the American Petroleum Institute (API), crude oil stocks in the U.S. rose by 1.3 million barrels in the week ending November 7. Meanwhile, gasoline and distillate inventories decreased.
OPEC Forecasts and Analyst Expectations
On Wednesday, oil prices fell by more than $2 per barrel following OPEC’s statement that global oil supply will exceed demand by 2026. This indicates a shift in the organization’s forecasts regarding the balance in the global energy market, compared to previously anticipated shortages.
The primary reason for the expected surplus is the expansion of production by OPEC+ countries—a coalition of cartel members and their partners, including Russia.
“OPEC’s signal of surplus has unlocked the suppressed ‘bearish’ sentiment; plus, the increase in U.S. stocks—prices continued to slide on Thursday morning,” noted Yan An from Haitong Securities.
Analysts point out that the future dynamics of the market will be determined by data from the U.S. Energy Information Administration (EIA), which is expected to be released soon. According to the latest EIA short-term forecast, U.S. oil production this year could reach a new historical high, while global stock levels will rise, maintaining a faster production pace compared to demand. This adds further pressure on prices.
At the same time, a number of experts expect prices to stabilize near current levels. They believe that the $60 per barrel mark could serve as key support, especially considering potential short-term disruptions in oil exports from the Russian Federation due to the implementation of stricter sanctions in the near future.