November WTI crude oil (CLX25) on Wednesday closed down -0.43 (-0.73%), and November RBOB gasoline (RBX25) closed up +0.0058 (+0.32%).
Crude oil and gasoline prices settled mixed on Wednesday. Crude remains under pressure on concerns over a global supply glut after the IEA on Tuesday forecast a record global oil glut of 4.0 million bpd for 2026. Strength in stocks on Wednesday and a weaker dollar were supportive factors for crude.
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On Tuesday, crude oil prices tumbled to a 5.25-month low following renewed trade tensions with China. A protracted US-China trade war would weigh on global economic growth and energy demand and is bearish for crude prices.
Cooling tensions in the Middle East have reduced some of the risk premium in crude prices, weighing on crude as it decreases the likelihood of disruptions to the region’s crude supplies following the agreement between Israel and Hamas.
An increase in crude oil held worldwide on tankers is bearish for oil prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days rose by +8.9% w/w to 93.96 million bbl in the week ended October 10.
Crude prices found support after OPEC+ on October 5 agreed to a 137,000 bpd increase in its crude production target, starting in November, which was less than market expectations of a potential 500,000 bpd boost to production. OPEC+ is in the midst of boosting output by a further 1.66 million bpd to fully reverse the 2.2 million bpd production cut seen in early 2024. OPEC’s September crude production rose by +400,000 bpd to 29.05 million bpd, the highest in 2.5 years.
Reduced crude exports from Russia are supportive of oil prices. Ukraine has targeted at least 28 Russian refineries over the past two months, exacerbating a fuel crunch in Russia and limiting Russia’s crude export capabilities. Ukrainian drone and missile attacks on Russian refineries and oil export terminals have curbed Russia’s total seaborne fuel shipments to 1.88 million bpd in the first ten days of October, the lowest average in over 3.25 years.
The outlook for higher crude production in Iraq is expected to boost global oil supplies, which is bearish for crude prices. Iraq recently announced that it had reached an agreement with the regional government of Kurdistan to resume oil exports from the Kurdish region via a pipeline to Turkey, which had been halted for the past two years due to a payment dispute. Iraqi Foreign Minister Hussein said that the resumption of crude exports could add 500,000 bpd of fresh oil supplies to global markets.
