Oil prices extend losses as rising US stockpiles deepen supply concerns

Oil prices continued to decline for the second straight day on Thursday as rising US crude inventories and concerns of an oversupplied market weighed on investor sentiment.

Brent crude slipped by 3 cents to trade at $62.69 a barrel in early Asian trading, following a sharp 3.8 percent drop a day earlier. US West Texas Intermediate (WTI) crude also edged down 5 cents to $58.44 a barrel after a 4.2 percent slump on Wednesday.

US stockpiles rise, demand outlook weakens

Market reports citing the American Petroleum Institute (API) showed that US crude stocks rose by around 1.3 million barrels in the week ending November 7. Although gasoline and distillate inventories fell, the overall build in crude reserves renewed worries about slowing demand in the world’s largest oil consumer.

The data followed a gloomy report from the Organization of the Petroleum Exporting Countries (OPEC), which projected that global oil supply will slightly outpace demand in 2026. The forecast marked a notable shift from OPEC’s earlier outlook that anticipated a supply shortfall.

“The hint of a supply surplus from OPEC has triggered fresh selling pressure in the oil market,” said Yang An, an analyst at Haitong Securities. “Combined with rising US inventories, traders are bracing for further downside in prices.”

Market braces for official data

The US Energy Information Administration (EIA) is due to release its official inventory figures later on Thursday. Analysts surveyed by Reuters expect crude stockpiles to have increased by about 2 million barrels last week.

Adding to the pressure, the EIA’s latest Short-Term Energy Outlook said that US oil production is likely to hit a higher record this year than earlier estimated. The report also predicted that global oil inventories will keep growing through 2026, as production continues to outpace demand.

Market dynamics have reflected this shift in sentiment. The WTI futures curve moved into contango on Wednesday, with the front-month contract trading at an 18-cent discount to oil for delivery six months later. The structure suggests weaker immediate demand and expectations of a persistent surplus.

With investors now watching both OPEC+ output decisions and upcoming US data, traders say sentiment may stay bearish in the near term unless demand signals improve.