The prices of the major crude oil grades fell by over 1 per cent on Wednesday as concerns of a possible global glut returned, with Brent crude futures losing 92 cents or 1.43 per cent to trade at $63.52 a barrel and the US West Texas Intermediate (WTI) crude futures declining by 96 cents or 1.59 per cent to $59.60 per barrel.
US crude stocks rose by 5.2 million barrels to 421.2 million barrels last week, according to data from the Energy Information Administration (EIA).
However, signs of stronger-than-expected gasoline (petrol) demand limited oil price losses. The fuel’s inventories fell by 4.7 million barrels last week to 206 million barrels.
Expectations that Canada, one of the world’s largest oil producers, could scrap a cap on oil and gas emissions, fueled concerns over a potential supply glut.
This was contained in Canadian Prime Minister Mark Carney’s budget plan, which was unveiled on Tuesday, and could see the North American country ditch its controversial oil and gas emissions strategy and unleash more oil.
This comes as the Organisation of the Petroleum Exporting Countries and allied producers (OPEC+) agreed on Sunday to increase output by 137,000 barrels a day in December. It decided to pause further increases in the first quarter of 2026.
Kazakhstan’s crude oil production, excluding gas condensate, declined 10 per cent last month to 1.69 million barrels per day, still above the OPEC+ output quota.
The International Energy Agency (IEA) warned in its October monthly report that the expected global oil oversupply would be larger than previously anticipated, amid soaring supply and subdued demand.
Surging Middle East supply, combined with robust flows from the Americas, swelled oil on water in September by a massive 102 million barrels, equivalent to 3.4 million bpd, which is the largest increase since the pandemic, the agency estimated.
There are some questions as the US sanctioned Russia’s top oil producers and exporters, Rosneft and Lukoil. Rosneft and Lukoil have been exporting 3 million barrels per day of oil, or roughly 3 per cent of the global supply.
The World Bank last week forecast that the oil glut “has expanded significantly in 2025 and is expected to rise next year to 65% above the most recent high, in 2020.”