By Ramy Zeytouni, Market Analyst at Ramy Zeytouni LLC
Crude oil prices were rebounding today, with West Texas Intermediate (WTI) trading near USD 60 per barrel, following several sessions of declines. The broader trend could remain weak, as both benchmarks are on track for a second consecutive weekly loss.
Persistent concerns about a global supply glut could continue to weigh on the market. OPEC+ production ticked higher, amid strong output growth from non-OPEC producers such as the US and Brazil. This reinforces fears that supply is outpacing demand. Sentiment worsened after recent data showed a surprise build in US crude inventories, which rose by 5.2 million barrels due to higher imports and lower refining activity. Furthermore, Saudi Arabia cut its December crude prices for Asian buyers, signaling a well-supplied market.
Simultaneously, demand signals are soft amid worries about global growth and fuel consumption. A softening US labor market and a stronger dollar have kept sentiment cautious. Broader economic concerns, such as the impact of an ongoing government shutdown, are also weighing on demand expectations. The market could remain stuck in a declining, choppy range, with the oversupply narrative limiting any significant rallies.