WASHINGTON (dpa-AFX) - Crude oil declined steeply on Wednesday, extending yesterday's losses, as concerns about excess supply and lower demand compelled investors to withhold from big moves.
WTI Crude Oil for December delivery was last seen trading down by $0.92 (or 1.52%) at $59.64 per barrel.
Data released by the American Petroleum Institute on Tuesday revealed that the U.S. crude oil inventories increased by 6.5 million barrels for the week ending October 31 following a 4-million barrel draw in the previous week..
Meanwhile, data released by the U.S. Energy Information Administration said crude oil inventories rose by 5.202 million barrels for the week ending October 31.
The report said gasoline inventories tumbled by 4.7 million barrels last week, while distillate fuel inventories, which include heating oil and diesel, edged down by 0.6 million barrels.
For the week ending October 31, crude inventories at the Cushing, Oklahoma, delivery hub rose by 300,000 barrels.
Oil prices are under pressure due to the production increase from OPEC+ as well as non-member countries.
On Sunday, after a virtual meeting with its member nations, OPEC announced that the alliance countries have agreed to increase output modestly by 137,000 barrels per day for December. More importantly, the cartel agreed to halt production hikes for early 2026.
Though the organization cited 'seasonality' and historically weaker demand in the first quarter of every year as the logic behind its decision, markets interpret it as an acknowledgement of oversupply concerns and slowing demand fears.
In its October monthly report, the International Energy Agency warned that the expected global oil oversupply would be larger than previously anticipated due to surge in supply versus a subdued demand.
So far, OPEC has been ignoring all data substantiating excess oil flooding to the market.
The U.S. government shutdown, which began on October 1, entered day number 36, setting a new record for the longest government closure in the U.S. history.
Even before October 1, the U.S. economy was indicating signs of slowing down due to 'tariff war' started by U.S. President Donald Trump and this shutdown has compounded the problems.
A weak economy would end up lowering energy demand and is a negative for oil prices.
Significantly, the legality of Trump's tariff imposition is now awaiting legal scrutiny by the U.S. Supreme Court, where a hearing commenced today.
Every major economy of the world is closely watching the progress of the case, although the verdict may not arrived until the middle of 2026.
After cutting interest rates for the second time of the year last month, U.S. Federal Reserve Chair Jerome Powell hinted that this may be the last rate cut for the year.
The Russia-Ukraine war has entered day number 1350.
While Russia struck civilian energy and port infrastructure in a massive overnight drone attack on Ukraine's southern region of Odesa, Ukraine struck an oil refinery in Russia's Nizhny Novgorod region, east of Moscow. Ukraine's drones also caused 'considerable damage' to a petrochemical plant in Bashkortostan in central Russia.
Fierce fighting continues in Pokrovsk, Donetsk where the Russian military has encircled a larger area.
Recently, the U.S. sanctioned Russia's two major oil producers, Rosneft and Lukoil, with a wind-down period until November 21 until the sanctions snap into place.
The sanctions injected significant uncertainty into the market, prompting major buyers of Russian oil namely, China, India and Turkey, to seek alternative crude supplies.
In the Middle East, the ceasefire between Israel and Palestine holds on with things so far under control.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News