Oil prices edged lower on Thursday, extending losses from the previous session, after a report showing rising crude inventories in the US reinforced concerns that the global supply is more than sufficient to meet current fuel demand.
Brent crude futures fell 9 cents, or 0.1%, to $62.62 a barrel at 0336 GMT, after dropping 3.8% a day earlier. US West Texas Intermediate crude fell 11 cents, or 0.2%, to $58.38 a barrel, extending a 4.2% decline on Wednesday.
Market sources, citing American Petroleum Institute figures, on Wednesday said US crude stockpiles rose by 1.3 million barrels in the week that ended November 7. Gasoline and distillate stockpiles dropped, the sources said, citing the API data.
Prices fell more than $2 a barrel on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said global oil supplies will slightly exceed demand in 2026, marking a further shift from the group's earlier projections of a deficit.
"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," said Suvro Sarkar, DBS Bank's energy sector team lead.
"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 it expected the supply surplus next year because of the wider production increases by OPEC+, a group of producers that includes OPEC members and allies like Russia.
"OPEC's signal of a supply surplus unleashed previously pent-up bearish sentiment in the previous session, while a US crude inventory build added pressure, pushing oil prices to continue to slide on Thursday morning," said Yang An, an analyst at Haitong Securities.
The US Energy Information Administration is expected to release inventory data later on Thursday. Other reports on Wednesday added to the bearish investor sentiment.
The EIA also said in its Short-Term Energy Outlook that US oil production is expected to set a larger record this year than previously forecast.
Global oil inventories will grow through 2026 as production increases faster than demand for petroleum fuels, adding to pressure on oil prices, the EIA added.
Looking ahead, some analysts expected prices to remain close to present levels.
"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," DBS' Sarkar said.
