Key Points:
- Oil prices fall as WTI crude drops below $60 after U.S. crude inventories rise 5.2M barrels.
- Global oversupply fears persist due to OPEC+ and non-member production.
- Market cautious amid trade shifts and geopolitical uncertainties.
Oil prices fall on Wednesday as traders evaluated mixed U.S. inventory data and ongoing concerns about global oversupply. West Texas Intermediate (WTI) crude fell 1.6% to settle below $60 per barrel, continuing a week of subdued trading within a $2 price range.
The decline followed a U.S. government report showing crude inventories rose by 5.2 million barrels for the week ending Oct. 31. The increase, the largest since July, was slightly below expectations set by industry analysts. Product inventories such as gasoline and distillates dropped, suggesting continued demand in domestic markets.
Imports rebound amid refinery maintenance
Analysts attributed the rise in crude stocks to higher imports and reduced refinery activity due to seasonal maintenance. “A rebound in imports and subdued refining activity amid seasonal maintenance has encouraged a build to U.S. crude inventories,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler. He added that lower crude export loadings compared with official Energy Information Administration (EIA) data also contributed to the increase.
Despite the inventory buildup, some analysts noted that lower product stocks could help limit further downward pressure on prices, yet oil prices fall remain remain cautious as the market awaits broader data on global output trends.
Global output adds to market pressure
Oil prices fall has been influenced to rising production from the Organization of the Petroleum Exporting Countries and its allies (OPEC+), as well as non-member nations. Analysts warn that additional supply could create a global surplus in 2026 if demand growth remains modest.
At the Adipec energy conference on Wednesday, the chief executive of commodities trader Mercuria said the global oil market could face an oversupply of as much as 2 million barrels per day next year. Such a scenario could keep prices under pressure in the months ahead.
Meanwhile, India’s Reliance Industries, a leading global refiner and regular buyer of crude, sold a shipment of Iraqi oil to a European refiner. Market observers said the sale was unusual for Reliance, which typically imports rather than exports crude oil. The move comes as Indian refiners face uncertainty following U.S. sanctions on Russia’s two largest oil producers, which could reduce imports from Moscow and shift buying patterns across Asia, influencing how oil prices fall globally.
Market outlook remains uncertain
Analysts said traders are closely monitoring shifts in supply and trade flows to gauge future price trends. The combination of higher U.S. stockpiles, ongoing OPEC+ production, and geopolitical developments has kept oil markets in a narrow range for weeks.
WTI’s fall below the $60 threshold is seen as a potential trigger for technical buying if prices rebound. However, persistent supply growth and uneven demand recovery may continue to limit gains, keeping oil prices fall under pressure.
For now, the market remains caught between opposing forces — steady demand indicators on one side and growing supply risks on the other — leaving traders cautious about the near-term direction of oil prices.
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