UPDATE: Oil prices are plunging in early trading as fears of a supply glut dominate the market. West Texas Intermediate (WTI) crude has fallen by more than 4% to settle around $58.5 per barrel, raising alarms among investors and analysts alike.
The decline follows OPEC’s revised surplus expectations for the global oil market and a bearish inventory report from the American Petroleum Institute (API). As these developments unfold, the WTI’s prompt time-spread has flipped to contango for the first time since February, signaling a concerning increase in oversupply both within and outside the OPEC+ alliance.
OPEC has maintained its global oil demand growth forecasts at 1.3 million barrels per day (b/d) for this year and 1.4 million b/d for 2026. However, projections for supply from producers outside OPEC+ are expected to rise by 920,000 b/d this year and 630,000 b/d in 2026, largely driven by increased output from the U.S., Canada, Brazil, and Argentina.
OPEC’s latest report indicates a slight increase in their own production by just 33,000 b/d month-on-month to 28.5 million b/d in October. However, this figure falls 450,000 b/d short of the initial increase plan established by their production quotas. While output additions from Saudi Arabia, Kuwait, Iraq, and Nigeria contributed to this rise, losses from Iran and Libya have partially offset gains.
In a related update, the latest API report reveals that U.S. crude oil inventories surged by 1.3 million barrels last week, while stocks in Cushing fell slightly by 43,000 barrels. This increase in inventories is a clear indicator of the growing supply concerns gripping the market.
The U.S. Energy Information Administration (EIA) has also made headlines, raising its U.S. crude oil production growth estimates for both this year and next. The EIA now anticipates U.S. crude production to average around 13.59 million b/d in 2025, an increase from the previous estimate of 13.53 million b/d. For 2026, the forecast has also been adjusted to 13.58 million b/d, up from 13.51 million b/d.
As the situation develops, markets are bracing for the upcoming monthly oil market report from the International Energy Agency, expected later today. Investors are keenly watching how these dynamics will impact prices moving forward.
With concerns over oversupply and stagnant demand, the oil market is facing a pivotal moment. As analysts continue to assess the implications of these developments, the urgency for stakeholders to adapt to the changing landscape has never been greater.
Stay tuned for updates as this story unfolds, and prepare for potential market volatility in the coming days.
