Oil Prices Edge Lower Amid Strong Dollar and Global Market Sell-Off
Oil prices fell slightly on Wednesday as a strong U.S. dollar and a broad sell-off in global financial markets weighed on investor sentiment. Traders also evaluated the latest supply data and upcoming production plans from OPEC+.
Crude Prices Slip to Two-Week Lows
Brent crude futures slipped by 6 cents, or 0.09%, to $64.38 per barrel by 0706 GMT, after reaching a two-week low in the previous session. U.S. West Texas Intermediate (WTI) crude declined 7 cents, or 0.12%, to $60.49 per barrel.
According to analysts at ANZ, the broad risk-off tone across financial markets prompted investors to reduce exposure to energy assets. The decline followed steep losses in Asian stocks, as Wall Street’s tech-led selloff renewed concerns over stretched valuations and global growth.
Stronger Dollar Adds Pressure on Oil Demand
The U.S. dollar index remained firm near a three-month high, supported by divisions within the Federal Reserve, suggesting limited chances of an interest rate cut in December.
A stronger dollar typically makes dollar-priced commodities like oil more expensive for international buyers, dampening demand. “Crude oil is trading lower as risk sentiment turned sharply negative, boosting the safe-haven dollar,” said Tony Sycamore, market analyst at IG.
U.S. Stockpiles Rise, OPEC+ Supply Outlook in Focus
Further downward pressure came from U.S. inventory data. The American Petroleum Institute (API) reported that U.S. crude stockpiles rose in the week ending October 31, signaling weaker short-term demand.
On the supply front, the Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, agreed to increase production by 137,000 barrels per day (bpd) in December. The group also announced a pause in further output hikes for the first quarter of 2026, though analysts at LSEG noted that the pause is “unlikely to offer meaningful support” for prices in the near term.
In October, OPEC’s total output rose only 30,000 bpd, as production declines in Nigeria, Libya, and Venezuela offset the planned increases.
Geopolitics and Sanctions Shape Supply Dynamics
Meanwhile, Western sanctions on Russia and Iran have led to record volumes of oil stored at sea, preventing a global supply glut. According to the CEO of Gunvor Group, one of the world’s largest commodity traders, this buildup in floating storage continues to distort traditional oil supply flows and pricing patterns.
