NYMEX WTI continues to edge lower in the early trading session today after falling by more than 4% to settle around $58.5/bbl yesterday. The decline was largely driven by OPEC’s revised surplus expectations for the global oil market, along with a bearish inventory report from the API. Meanwhile, West Texas Intermediate’s prompt time-spread flipped to contango for the first time since February, a fresh sign of rising oversupply from both outside and within the OPEC+ alliance.
In its monthly oil market report, OPEC left its global oil demand growth forecasts largely unchanged at 1.3m b/d and 1.4m b/d for this year and 2026 respectively. Supply projections from producers outside the wider OPEC+ alliance are expected to rise by 920k b/d this year and 630k b/d in 2026, largely driven by higher output from the US, Canada, Brazil and Argentina. However, OPEC modified its expectations for the global oil market balance and now expects a small supply surplus in 2026, following OPEC+ production increases and higher supply from other producers. This compares to its earlier projections of a more balanced market.
Meanwhile, the release also shows that OPEC increased supply by just 33k b/d month on month to 28.5m b/d in October. However, this was 450k b/d less than the initial increase plan set by production quotas. The monthly output addition by Saudi Arabia, Kuwait, Iraq and Nigeria was partially offset by supply losses from Iran and Libya. The International Energy Agency (IEA) will release its monthly oil market report later today.
API’s numbers show that US crude oil inventories increased by 1.3m barrels over the last week, while crude stocks in Cushing fell slightly by 43k barrels. Changes in refined product inventories remained mixed, with gasoline inventories falling by 1.4m barrels, and distillate stocks rising by 944k barrels and 2.5m barrels, respectively. The more widely followed EIA weekly inventory report will be released later today.
The Energy Information Administration (EIA) released its latest Short Term Energy Outlook yesterday, raising its US crude oil production growth estimates for both this year and next. The EIA now expects US crude oil production to average around 13.59m b/d in 2025, compared to a previous estimate of around 13.53m b/d. For 2026, the EIA expects US oil supply to average around 13.58m b/d, compared to its previous forecast of 13.51m b/d. On the other hand, the EIA estimates US petroleum consumption to remain flat at around 20.5m b/d this year and in 2026.