The current decline began when a three-day rally stalled at the 50-day moving average resistance at $60.84. Selling intensified after WTI broke below a series of key technical levels, including the 50% retracement at $59.27, a swing bottom at $58.83, and the 61.8% level at $58.49. Prices eventually bottomed out at $58.12 before stabilizing ahead of Thursday’s U.S. inventory release.
Inventory Build Reinforces Oversupply Concerns
Wednesday’s drop of over $2 per barrel followed industry data from the American Petroleum Institute, which showed U.S. crude inventories rose by 1.3 million barrels for the week ending November 7. Analysts expect the EIA to confirm this trend later Thursday, potentially applying more downward pressure on prices.
Global supply concerns also resurfaced after UBS highlighted inventory builds across major storage hubs in Europe, Singapore, Fujairah, and the United States. This broad-based accumulation is intensifying fears of a supply glut heading into 2026.
OPEC, IEA Shift Tone on Future Supply-Demand Balance
OPEC’s latest monthly oil report added to the bearish sentiment, forecasting a supply surplus in 2026 due to expanded output from OPEC+ members, including Russia. This marks a notable shift from OPEC’s previously more bullish projections, with DBS Bank’s energy strategist noting the group is “acknowledging the possibility of a supply glut.”
The International Energy Agency echoed this view, raising its supply growth forecasts for 2025 and 2026 and projecting further stock builds as production outpaces demand. Meanwhile, the U.S. EIA’s Short-Term Energy Outlook forecast a record U.S. output this year, further contributing to the global oversupply narrative.
