Oil prices edged lower during early Asian trading on Wednesday, as another rise in U.S. crude inventories intensified worries that global supply is outstripping demand.
West Texas Intermediate (WTI) slipped 0.25% to $60.59 a barrel, while Brent crude fell about 0.3% to $64.71. The modest pullback followed a brief rally in the previous session, when former President Donald Trump’s comments about interviewing candidates for Federal Reserve chair lifted risk sentiment.
Market attention quickly turned to fresh supply data. The American Petroleum Institute reported late Tuesday that U.S. commercial crude inventories rose by roughly 4.4 million barrels last week. Gasoline and distillate stocks also increased, reinforcing views that markets are amply supplied heading into year-end.
Analysts surveyed by The Wall Street Journal expect the Energy Information Administration to report a third consecutive weekly crude build when it releases official data later today. Another increase would likely deepen concerns over a well-supplied market.
The broader supply backdrop has grown increasingly bearish in recent months. The International Energy Agency recently warned that a looming oil glut in 2026 could be worse than initially expected. U.S. crude output hit a new record last week even as drilling activity slowed, adding to the global surplus.
Meanwhile, China—the world’s top crude importer—has used recent price dips to replenish strategic and commercial stockpiles rather than boost refinery runs. Reuters estimates that the country’s combined domestic output and imports exceeded refinery throughput by about 690,000 barrels per day in October. This pattern of stockpiling when Brent trades in the mid-$60s has helped absorb some excess supply but also signals that end-user fuel demand remains subdued.
In response to these trends, analysts are growing more cautious. Goldman Sachs issued a report this week projecting a global surplus of around 2 million barrels per day in 2026, driven by delayed long-cycle projects coming online, further easing of OPEC+ cuts, and rising non-OPEC supply from the U.S. and Brazil.
The bank now forecasts Brent to average about $56 a barrel in 2026, with WTI around $52—both well below current forward prices. The IEA’s latest outlook also points to a potentially larger surplus if demand underperforms.
Market participants are now focused on today’s EIA inventory report. Another sizable crude build—especially if accompanied by weak gasoline or distillate demand—could keep pressure on prices into the Thanksgiving holiday. A smaller-than-expected increase or a surprise drawdown might trigger a short-lived rebound, though it would be unlikely to shift the broader narrative of ample supply and cautious consumption.
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