Brent crude falls for second day in a row

Oil prices fell for the second consecutive session, with Brent crude futures dropping to $64 a barrel, a clear indication that pessimism dominates the market on fears of worsening global oversupply and weakening demand strength.

Double pressure: Record U.S. inventories and rising OPEC+ production

Recent data reveals two key factors behind the decline.

- First, data from the American Petroleum Institute (API) showed a surprise rise in US crude inventories by 6.5 million barrels last week, marking the biggest increase since July, indicating weak domestic consumption. In contrast, inventories of refined petroleum products fell, creating a mixed picture for demand.

- Second, the OPEC+ alliance and non-member producers continue to pump large amounts of oil into the market, raising investor concerns of a global supply glut that outstrips consumer demand.

OPEC+ between increasing production and putting plans

on hold In a reaction that reflects its recognition of market challenges, the OPEC+ alliance recently agreed to a slight increase in production for December.

However, the more important message lies in the alliance's future plans, with any further increases expected to be put on hold in early 2026.

This move is widely interpreted as a recognition by the major producers of the weak medium-term demand outlook, and their fear of worsening oversupply if they continue to raise production levels.

Global slowdown in industrial activity dampens energy demand

prospects It's not just supply-side concerns, but also demand that seems to be faltering.

The latest Purchasing Managers' Index (PMI) data for the manufacturing sector in major economies such as China and the United States highlighted a disappointing slowdown in industrial activity.

Since industry is a key pillar of demand for energy and petroleum products, this slowdown dampens expectations of strong global oil demand going forward, adding further downward pressure on prices.  

Market outlook: Will Brent's downtrend continue?

With all these factors combined, the short-term outlook for Brent is heading towards more volatility and downward pressure.

Traders are currently focused on the official US oil inventories data from the Energy Information Administration (EIA) to confirm supply trends.

Any new developments regarding OPEC+ production policies or signs of China's economic recovery will also be on the market's radar, looking for any glimmer of hope that could rebalance and halt the downward march.

In the end, Brent crude is being buffeted by a storm of negative factors from the supply side due to high inventories and rising production, and from the demand side as global industrial activity slows.

Until there are clear signs of an absorption of this surplus or an improvement in macroeconomic indicators, the oil market looks set to continue hovering in a zone of uncertainty and bearishness.