U.S. crude inventories rose by 4.4 million barrels last week, marking a third consecutive weekly build and intensifying oversupply worries.
China is stockpiling crude amid soft refinery demand, contributing to a months-long buildup of global oil reserves.
Goldman Sachs forecasts a 2 million bpd global surplus by 2026, projecting Brent to average $56 and WTI $52 as supply growth outpaces demand.
Oil prices eased in early Asian trading on Wednesday as traders reacted to another rise in U.S. oil inventories and signals continue to mount that global supply is running ahead of demand.
At the time of writing, WTI was trading at $60.59 per barrel, down 0.25% on the session, while Brent slipped to $64.71, down by roughly 0.3%. The drop came after prices had climbed in the previous session on the back of Trump announcing interviews for a new Fed chair, a statement that briefly lifted risk sentiment by reviving expectations of a more growth-friendly monetary stance.
The latest report from the American Petroleum Institute was then released, showing U.S. commercial crude stocks rising by about 4.4 million barrels in the week to 14 November, with gasoline and distillate inventories also posting builds. This sizeable increase in crude stocks reinforced the perception that the world’s largest oil consumer is comfortably supplied as the year draws to a close. A survey compiled by The Wall Street Journal and reported by MarketWatch suggests that analysts are expecting a third straight weekly increase in crude inventories in the EIA’s figures, which will be released later today. Both the API numbers and the expectation of another build being reported by the EIA today will add to oversupply concerns.
The broader supply backdrop has turned steadily more bearish over the past few months, with the IEA warning that the 2026 oil glut could be worse than feared. U.S. crude production climbed to record levels last week, even as drilling activity slowed, and new customs and production data out of China show that the world’s biggest crude importer has been using the recent price moderation to quietly rebuild strategic and commercial stocks rather than ramping up refinery runs. Reuters’ analysis of October flows estimates that China’s combined domestic production and imports exceeded refinery throughput by about 690,000 bpd, the latest in a string of monthly surpluses that have added some 900,000 bpd to stockpiles since March. That pattern – buying extra crude when Brent dips into the mid-$60s – helps absorb some of the surplus on the water but also underlines that end-user fuel demand is not surging; refiners are choosing to store rather than sell.
On the back of these developments, analysts are turning increasingly bearish on oil prices. A new oil market outlook from Goldman Sachs this week projects a roughly 2 million bpd global surplus in 2026 as delayed long-cycle projects come online, OPEC+ unwinds more of its remaining cuts, and non-OPEC supply from the U.S. and Brazil continues to edge higher. The bank now sees Brent averaging about $56 and WTI about $52 in 2026, well below current forward prices, with the International Energy Agency’s latest projections pointing to an even larger potential surplus if demand growth underperforms. While those forecasts don’t dictate today’s spot price, they do shape how much risk appetite there is among funds to buy dips in the front of the curve when the medium-term picture is one of abundant supply.
The immediate focus is squarely on today’s EIA report, with another sizeable crude build, especially if accompanied by weaker gasoline or distillate demand, keeping pressure on prices into Thanksgiving. A smaller-than-expected build or a surprise draw, particularly in products, could spark a short-covering bounce but would not, on its own, erase the larger narrative of plentiful supply and cautious demand.
Credit: Oilprice.com
