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On Wednesday, December WTI crude oil closed down $2.55 (-4.18%) at a three-week low, while December RBOB gasoline dropped $0.0566 (-2.81%). The decline was driven by OPEC’s announcement of an unexpected global crude surplus of 500,000 bpd for Q3, reversing last month’s deficit projection of 400,000 bpd. Additionally, the EIA raised its 2025 US crude production estimate to 13.59 million bpd from 13.53 million bpd.
Amid these developments, Saudi Arabia lowered the price of its main crude grade for Asia to an 11-month low, adding downward pressure on prices. US crude inventories as of October 31 were reported at 5.3% below the seasonal five-year average, with crude production reaching a record 13.651 million bpd. The Baker Hughes report indicated that the number of active US oil rigs remained unchanged at 414.
In related news, reduced Russian crude exports due to Ukraine’s attacks on its refineries and new sanctions have further impacted the market. Current estimates predict that this week’s EIA crude inventories will rise by 1.5 million barrels, while gasoline supplies are expected to decline by 2.5 million barrels.
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