Oil extends losses on US inventory build, OPEC forecast shift
Oil prices fell for a second day on Thursday as an industry report showing rising crude inventories in the U.S., the world's biggest crude consumer, reinforced concerns that global supply is more than ample to meet current fuel demand.
Brent crude futures fell 3 cents, or 0.03%, to $62.69 a barrel by 0234 GMT, after dropping 3.8% in the previous session. U.S. West Texas Intermediate crude fell 5 cents, or 0.09%, to $58.44 a barrel, extending its 4.2% decline on Wednesday.
Market sources citing American Petroleum Institute figures on Wednesday said U.S. crude stockpiles rose by 1.3 million barrels in the week ended November 7. Gasoline and distillate stockpiles dropped, the sources said, citing the API data.
Prices fell more than $2 a barrel on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) published its monthly report saying global oil supply will slightly exceed demand in 2026, marking a further shift from the group's earlier projections of a supply deficit.
"OPEC's signal of a supply surplus unleashed previously pent-up bearish sentiment in the previous session, while a U.S. crude inventory build added pressure, pushing oil prices to continue to slide on Thursday morning," said Yang An, analyst at Haitong Securities.
OPEC forecast the supply surplus next year because of the wider production increases by OPEC+, a group of producers that includes OPEC members and allies such as Russia.
The U.S. Energy Information Administration will release its inventory data later on Thursday.
Nine analysts polled by Reuters ahead of the U.S. inventory data estimated on average that crude inventories rose by about 2 million barrels.
Other reports on Wednesday added to the bearish investor sentiment.
The EIA also said in its Short-Term Energy Outlook that U.S. oil production is expected to set a larger record this year than previously forecast.
EIA also said that global oil inventories will grow through 2026 as production is increasing faster than demand for petroleum fuels, adding to pressure on oil prices.
The bearish sentiment in the market was further indicated by a shift in the market structure for WTI on Wednesday, with the spot price dropping below the futures for delivery in six months' time, known as a contango. A contango typically indicates that there is less prompt demand for oil or an expectation of excess supply in later months.
On Thursday, the front-month WTI contract was at a discount of 18 cents to the contract in six months' time.
