NYMEX WTI continues to drift lower in early trading after dropping over 4% to $58.5/bbl yesterday. The decline is fueled by OPEC’s revised surplus expectations and a bearish API inventory report, highlighting growing oversupply risks. WTI’s prompt time-spread flipped to contango for the first time since February, signaling excess supply both within and outside the OPEC+ alliance.

OPEC left its global oil demand growth forecasts unchanged at 1.3m b/d for 2025 and 1.4m b/d for 2026, but now expects a small supply surplus in 2026, driven by higher output from the US, Canada, Brazil, and Argentina. Monthly OPEC output rose modestly by 33k b/d in October, below initial quota plans, with gains from Saudi Arabia, Kuwait, Iraq, and Nigeria partly offset by losses from Iran and Libya.

The US Energy Information Administration (EIA) raised its crude production forecasts to 13.59m b/d for 2025 and 13.58m b/d for 2026, while US consumption remains flat at 20.5m b/d. Rising inventories, coupled with strong production, continue to pressure oil prices.