Oil prices fall amid rising US inventories and OPEC forecast change

Oil prices fell slightly on Thursday, continuing their decline from the previous session, as a report showing an increase in US oil inventories fueled fears that global supply is more than sufficient to meet current fuel demand, UNN reports with reference to Reuters.

DetailsBrent crude prices were unchanged at $62.71 a barrel by 06:45 GMT (08:45 Kyiv time) after falling 3.8% the previous day. US West Texas Intermediate crude fell 3 cents, or 0.1%, to $58.46 a barrel, extending its 4.2% decline on Wednesday.

Market sources, citing data from the American Petroleum Institute (API), reported on Wednesday that US crude inventories rose by 1.3 million barrels in the week ended November 7. Gasoline and distillate inventories fell, sources said, citing API data.

Prices fell more than $2 a barrel on Wednesday after OPEC said global oil supplies in 2026 would slightly exceed demand, another departure from the group’s previous forecasts of a deficit.

“The recent price decline appears to be driven by OPEC’s revision of the supply-demand balance for 2026 in its monthly report, which confirms that the group now acknowledges the possibility of an oversupply in 2026, contrary to its more optimistic stance throughout the period,” said Suvro Sarkar, head of the energy sector group at DBS Bank.

“This is consistent with the recent decision to suspend the unwinding of voluntary production cuts in the first quarter. Given that this is merely a shift to a more realistic market assessment, it does not change the fundamentals, so the market reaction is excessive,” he noted.

OPEC said it expects an oversupply next year due to larger production growth from OPEC+, a group of producers that includes OPEC members and its allies such as Russia.

OPEC’s signal of oversupply awakened previously suppressed bearish sentiment in the previous session, while rising US crude inventories added to the pressure, pushing oil prices further down on Thursday morning

The US Energy Information Administration (EIA) is expected to release inventory data later on Thursday. Other reports released on Wednesday reinforced investors’ pessimistic sentiment.

The EIA also said in its short-term energy outlook that US oil production is expected to set a higher record this year than previously forecast.

The EIA added that global oil inventories will grow until 2026 as production grows faster than demand for petroleum products, putting further pressure on oil prices.

Looking ahead, some analysts expect prices to remain close to current levels.

“Oil prices at around $60 a barrel should find significant support, especially given that short-term disruptions to Russian exports could occur after stricter sanctions come into effect,” said Sarkar of DBS.

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