WASHINGTON (dpa-AFX) - Crude oil has edged lower on Tuesday as the impact of last week's Ukrainian attacks on Russian ports stands limited, while long-term oversupply concerns due to forecasts indicating a supply-demand mismatch continue to linger.
WTI Crude Oil for December delivery was last seen trading down by $0.09 (or 0.13%) at $60.01 per barrel.
In the ongoing war between Russia and Ukraine, after being hit by a Ukrainian missile last Friday, Russia's largest export hub in the Black Sea, Novorossiysk, and a neighboring Caspian Pipeline Consortium terminal halted oil exports temporarily.
The paused traded volume was approximately 2.2 million barrels per day (or 2% of global supply), which triggered a rally in global oil prices.
Ukraine also has confirmed hitting Russia's Ryazan oil refinery as well as Novokuibyshevsk oil refinery in Russia's Samara region, although there is no official confirmation from the Russian side.
Concerns rose about the possibility of a prolonged shutdown in exports by the world's second largest oil exporter and the resultant shortage in Russian oil. However, two tankers were reportedly loading oil at Novorossiysk yesterday.
In an attempt to force Russia to agree to a ceasefire, the U.S. imposed sanctions that bans trade-deals by any U.S. trading partner with Russian oil majors, Rosneft and Lukoil. The sanctions are set to take effect from November 21.
Yesterday, U.S. President Donald Trump warned that legislation is underway that would impose U.S. tariffs up to as high as 500% on any country that does business with Russia. Trump suggested that even Iran may be added to that list.
Meanwhile, a recent U.S. EIA forecast indicated an oil market oversupply in 2026 due to excess production from both the OPEC+ alliance as well as non-OPEC countries while it projected slow demand growth.
While OPEC's recent report ignored EIA's supply-demand forecast, the cartel's decision on November 2 to pause any increases in production for the first quarter of 2026 was interpreted by traders as an acknowledgement of a low-demand scenario unfolding in the coming months. Of note, OPEC+ member nations had agreed to hike production targets for December by 137,000 barrels per day.
In the Middle East, Hamas has rejected allowing any foreign military in Gaza in the name of International Stabilization Force which is a part of the second phase of Gaza Peace Plan proposed by Trump. The region, by and large, retains the peace brought by the first phase of the peace plan.
Overall, excess supply concerns are on the rise with a recent ING report forecasting a surplus through 2026 and it potentially limited the gains in oil price brought by the Russian supply side disruption.
In the U.S., the longest government shutdown ended last Thursday. With agencies returning to activity, key economic releases are anticipated by analysts to get a clue on the state of economy as well as to speculate on the U.S. Federal Reserve's monetary policy which could impact the U.S. dollar.
Analysts feel that crude oil being a dollar-denominated commodity, the Fed's decision by next month could mark the trajectory of oil prices.
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