Oil Prices Rise as Oversupply Concerns Ease, Demand Outlook Still Weak
Oil prices edged higher on Thursday, recovering slightly after falling to a two-week low in the previous session. The modest gains came as oversupply fears eased, although weak global demand continued to weigh on sentiment.
Brent crude futures rose 17 cents, or 0.27%, to $63.69 per barrel by 04:55 GMT, while U.S. West Texas Intermediate (WTI) crude gained 18 cents, or 0.3%, to $59.78.
OPEC+ Supply Control Helps Ease Oversupply Fears
Crude prices have fallen for three consecutive months through October as concerns about excess supply grew. The Organization of the Petroleum Exporting Countries (OPEC) and its allies have increased output, while non-OPEC producers also continue to ramp up production.
However, sanctions imposed by the U.S. and the U.K. on Russia’s largest oil companies in late October helped shift sentiment, softening the market’s bearish outlook, according to Haitong Securities.
The firm also noted that OPEC+ plans to pause further production increases during the first quarter of next year, a move that has helped reduce supply glut concerns.
Global Demand Growth Remains Subdued
Despite improving supply dynamics, demand growth remains sluggish. Data from J.P. Morgan shows that global oil demand has risen by 850,000 barrels per day so far in 2025, below the bank’s earlier projection of 900,000 barrels per day.
“High-frequency indicators suggest that U.S. oil consumption remains subdued,” J.P. Morgan said, citing weak travel activity and lower container shipments as signs of soft demand.
The U.S. Energy Information Administration (EIA) reported that U.S. crude inventories rose by 5.2 million barrels last week to 421.2 million barrels, far exceeding expectations for a modest 603,000-barrel increase. The data reinforced concerns about sluggish demand in the world’s largest oil-consuming nation.
Analysts Expect Further Downside in Oil Prices
Analysts at Capital Economics warned that downward pressure on oil prices is likely to persist, maintaining a below-consensus forecast of $60 per barrel by the end of 2025 and $50 by the end of 2026.
Meanwhile, Saudi Arabia, the world’s top oil exporter, has cut crude prices for Asian buyers in December, responding to a well-supplied market as OPEC+ producers continue to expand output.
The combination of ample supply, softening demand, and muted economic activity suggests that oil prices may remain under pressure in the coming months despite temporary rebounds.
