Inventory Build Reinforces Oversupply Concerns
The most bearish development of the week came from the U.S. Energy Information Administration, which reported a 6.4 million barrel build in crude stocks—well above expectations for a 1.96 million barrel rise.
This confirmed earlier API estimates and added to concerns that global supply continues to outpace demand. Additional builds were reported in storage hubs across Europe, Singapore, and Fujairah, reinforcing the narrative that excess barrels are struggling to find buyers.
OPEC’s latest oil market report also contributed to the bearish tone, forecasting a surplus in 2026 due to increased output from OPEC+ members, including Russia.
The IEA echoed this view by raising its supply growth projections for 2025 and 2026.
Combined with the EIA’s forecast for record U.S. production this year, the tone among major agencies has shifted toward acknowledgment of a persistent oversupply problem heading into the mid-decade period.
Russian Port Attack Fuels Short-Term Rebound
Despite the heavy inventory pressures, the market rallied sharply on Friday following a Ukrainian drone attack on Russia’s Novorossiysk port. The incident damaged oil infrastructure and halted exports from a terminal that handles over 700,000 barrels per day. While no long-term disruption has been confirmed, the event injected fresh geopolitical risk into the market, triggering a wave of short-covering.
