Oil Prices Stabilise After Sharp Two Day Decline as US Stockpiles Surge
Highlights:
Oil steadies following the largest increase in US crude inventories since July
WTI continued to sit under US$60 and Brent remained beneath the US$64 mark at the time of writing.
EIA data signals rising supply pressures, despite product stock drawdowns
Oil prices found some stability in early trade after sliding for two consecutive sessions, following new data confirming a substantial rise in US crude inventories. The Energy Information Administration (EIA) reported that oil stockpiles increased by 5.2 million barrels in the week ending October 31, marking the biggest weekly build since July.
At the time of writing, West Texas Intermediate (WTI) crude was trading below US$60 a barrel after falling 2.4% across the previous two sessions, while Brent crude remained under US$64.
Inventory Build Suggests Supply Pressure is Growing
The latest stockpile increase reinforces concerns that global oil supply is expanding at a faster pace than demand. Analysts note that the build was slightly smaller than some market forecasts, but still significant enough to weigh on sentiment.
However, the bearish tone was tempered by a notable drawdown in refined products. The EIA reported that US petrol inventories fell by nearly 5 million barrels, reaching their lowest level in three years. The decline occurred even as domestic fuel demand and export levels held relatively steady.
Market Outlook: Oversupply Risks Coming Into Focus
Broader supply concerns continue to dominate market narratives. The head of global commodities trader Mercuria told attendees at the Adipec energy conference in Abu Dhabi that the current oversupply is building slowly but could reach as much as 2 million barrels per day in the coming year.
With US output remaining strong and OPEC+ production continuing to flow, traders are monitoring whether demand growth will be sufficient to absorb the rising surplus. For now, oil markets appear to be in a cautious holding pattern as supply pressures deepen.
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Oil Prices Stabilise After Sharp Two Day Decline as US Stockpiles Surge
Highlights:
Oil prices found some stability in early trade after sliding for two consecutive sessions, following new data confirming a substantial rise in US crude inventories. The Energy Information Administration (EIA) reported that oil stockpiles increased by 5.2 million barrels in the week ending October 31, marking the biggest weekly build since July.
At the time of writing, West Texas Intermediate (WTI) crude was trading below US$60 a barrel after falling 2.4% across the previous two sessions, while Brent crude remained under US$64.
Inventory Build Suggests Supply Pressure is Growing
The latest stockpile increase reinforces concerns that global oil supply is expanding at a faster pace than demand. Analysts note that the build was slightly smaller than some market forecasts, but still significant enough to weigh on sentiment.
However, the bearish tone was tempered by a notable drawdown in refined products. The EIA reported that US petrol inventories fell by nearly 5 million barrels, reaching their lowest level in three years. The decline occurred even as domestic fuel demand and export levels held relatively steady.
Market Outlook: Oversupply Risks Coming Into Focus
Broader supply concerns continue to dominate market narratives. The head of global commodities trader Mercuria told attendees at the Adipec energy conference in Abu Dhabi that the current oversupply is building slowly but could reach as much as 2 million barrels per day in the coming year.
With US output remaining strong and OPEC+ production continuing to flow, traders are monitoring whether demand growth will be sufficient to absorb the rising surplus. For now, oil markets appear to be in a cautious holding pattern as supply pressures deepen.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au