WASHINGTON (dpa-AFX) - Crude oil went for a freefall on Wednesday as investors dissected OPEC's monthly report and contrasted it with the International Energy Agency's recent forecast on demand and supply.
WTI Crude Oil for December delivery was last seen trading down by $2.62 (or 4.31%) at $58.40 per barrel.
In its monthly report released today, the Organization of Petroleum Exporting Countries stated that Russian oil production rose in October to 9.382 million barrels per day, up 47,000 bpd from September but below 9.481 million bpd of Russia's OPEC+ output quota for October.
It further added that Kazakhstan's oil output last month declined by 155,000 bpd to 1.707 million bpd, still above its quota set by OPEC+ for October of 1.529 million bpd.
Switching from its own earlier predictions of a supply crunch, the group's report showed that global oil supply will match demand in 2026, creating a more balanced oil market.
OPEC also forecast firm growth by the global economy and for global oil demand to rise by 1.3 million barrels per day in 2025 and at a slightly faster rate in 2026, maintaining its previous projection.
The group now estimates global supply exceeded demand by about 500,000 barrels per day, reversing its prior deficit forecast. However, OPEC has lowered its forecast for 2026 demand for crude oil from OPEC+ member nations by 100,000.
Notably, other forecasters have predicted supply to exceed demand in 2026 by huge volume.
The IEA's most recent forecasts indicated that supply could exceed demand by about 4 million bpd in 2026.
In contrast to the forecast by the IEA, OPEC's predictions are at the higher end of estimates, with a projected supply deficit in 2026 starkly against what IEA has speculated. The IEA's updated outlook will be released on Thursday.
After Russian President Vladimir Putin's denial to end Russia's war with Ukraine despite repeated requests, on October 22, U.S. President Donald Trump imposed sanctions on Russian oil corporations Rosneft and Lukoil and threatened countries buying Russian oil with 'penalty tariffs.' The sanctions are set to take effect from November 21.
Major Russian oil purchasers, China, India, and Turkey are looking away from Russia for potential suppliers. As a result, Russia is discounting the offer price by $20 a barrel. Prior to the sanctions, the discounts were hovering at around $12 per barrel.
Even as the battle between the two nations continues fiercely, as sanctions are biting Russia heavily, today the Russian envoy announced that it was ready to restart talks with Ukraine in Istanbul, Turkey.
In the U.S., the government shutdown entered day number 43 today.
In a significant breakthrough, week-long negotiation between Republicans and Democrats resulted in the Senate advancing a short-term funding bill to run the government on Monday. The bill still requites the approval of the House of Representatives and the president.
The end of longest shutdown in the U.S. would enable the release of key economic data as well as rejuvenate consumption.
Since the U.S. is the largest consumer of oil and energy, oil markets view these developments as positive.
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