Oil prices softened again on Thursday, adding to the sharp declines seen in the previous session, after fresh data pointing to higher U.S. crude inventories deepened worries that global supply continues to outpace demand.
By 06:45 GMT, Brent crude futures were steady at $62.71 per barrel, unchanged after Wednesday’s 3.8% drop. U.S. West Texas Intermediate crude edged down 3 cents, or 0.1%, to $58.46 a barrel, extending the prior session’s 4.2% slide.
Market participants, referencing figures from the American Petroleum Institute, said late Wednesday that U.S. crude inventories climbed by 1.3 million barrels for the week ending November 7. The API data also pointed to declines in gasoline and distillate stocks.
Prices were hit hard on Wednesday after the Organization of the Petroleum Exporting Countries signaled that world oil supply is likely to exceed demand in 2026—its latest indication of a shift away from prior expectations of a production deficit.
Suvro Sarkar, energy sector team lead at DBS Bank, said: “Recent (price) weakness seems to be driven by OPEC’s revision of supply-demand balance in 2026 in its monthly report, which confirms the group is now acknowledging the possibility of a supply glut in 2026, in contrast to its more bullish stance all along.”
He added: “This falls in place with the recent decision to pause the unwinding of voluntary production cuts in 1Q. Given that this is just a shift to a more realistic reading of the market, it doesn’t change fundamentals, hence the market reaction seems overdone.”
OPEC said the supply overhang expected for next year reflects broader output increases from OPEC+, the coalition including both OPEC members and partners such as Russia.
Yang An, analyst at Haitong Securities, noted: “OPEC’s signal of a supply surplus unleashed previously pent-up bearish sentiment in the previous session, while a U.S. crude inventory build added pressure, pushing oil prices to continue to slide on Thursday morning.”
Traders are now awaiting official U.S. Energy Information Administration inventory data due later Thursday. Additional reports released on Wednesday contributed to the negative tone in energy markets.
In its Short-Term Energy Outlook, the EIA said U.S. output is on track to hit an even higher record this year than previously expected. The agency also projected that global oil inventories will keep rising through 2026 as production expands faster than fuel demand, adding further downward pressure on prices.
Looking ahead, some analysts believe crude is unlikely to fall far below current levels.
DBS’ Sarkar said: “There should be considerable support to oil prices around $60/bbl, especially given there could be short-term disruption to Russian export flows once stricter sanctions kick in.”