Oil prices gradually declined as U.S. stockpiles increase and OPEC forecasts change
Oil prices gradually declined on Thursday, extending losses from the previous session, amid two major factors: A surprise rise in US inventories and downbeat reports from OPEC about the global market balance.
Details of the price movements:
West Texas Intermediate crude prices slipped near the $58.30 per barrel level.
Brent crude dropped to a low of $62.40 per barrel.
The drop reflects the continuation of a sharp sell-off on Wednesday, when prices lost more than $2 per barrel, on the back of a statement from the Organization of Petroleum Exporting Countries (OPEC).
OPEC report: A radical shift in expectations
In its latest report, OPEC announced a significant shift in its outlook, predicting that global oil supply will slightly exceed demand through 2026.
This is a reversal from its previous forecast of a market deficit.
OPEC attributed the projected surplus to wider production increases planned by the OPEC+ alliance, which includes allies such as Russia.
US pressure: Record inventories and production forecasts
On the other hand, data from the United States added to the pessimistic sentiment in the market:
- A report showed a rise in U.S. crude inventories, fueling fears of weak domestic demand.
- The US Energy Information Administration (EIA) is expected to release official inventory data later.
- In its short-term outlook, the administration raised its forecast for U.S. oil production this year to a record high, higher than previously expected.
Growth of global inventories through 2026
The U.S. Energy Information Administration (EIA) revealed a broader outlook, stating that global oil inventories will continue to grow through 2026, as the pace of production increases will outpace the pace of demand growth, putting further downward pressure on prices.
Analysts' forecasts: Relative stability
Amid these bearish factors, some analysts expect prices to remain near their current levels for the foreseeable future, pending new, clearer indications about global demand trends and future decisions of the OPEC+ alliance.
