Oil falls to four-month lows on potential OPEC+ production boost, higher U.S. stocks

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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Crude oil futures stumbled to their third straight daily loss Wednesday on continuing worries over a potential OPEC+ production increase, while government data showed U.S. crude inventories climbed by nearly 1.8 million barrels last week.

The oil market has been bearish this week on reports that OPEC+ could agree to raise oil production by as much as 500,000 bbl/day in November at the cartel's next meeting on Sunday, triple the increase made for October and exacerbating concerns over excess supplies, as Saudi Arabia seeks to reclaim market share.

"Any added barrels to global supply will be taken as a major negative by traders," BOK Financial analyst Dennis Kissler said in a note.

Adding to oversupply concerns, commercial crude oil stocks excluding the strategic petroleum reserve rose by 1.8 million barrels from the prior week, according to data from the Energy Information Administration, much more than the average 300,000-barrel increase forecast by analysts.

Motor gasoline stockpiles rose 4.1 million barrels from the previous week, compared to analyst consensus for flat inventories, and distillate fuel stocks rose by 600,000 barrels, compared to forecasts for a decline of 800,000 barrels, the EIA reported.

Sentiment also was dampened by the uncertainty generated from the U.S. government shutdown.

Crude oil faces prices in the $50s in the coming quarters on expectations for "punishing oversupply" as production expands, according to Macquarie Group, which now sees WTI crude averaging ~$57/bbl in 2026, down from an earlier forecast of ~$60/bbl.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for November delivery closed -0.9% to $61.78/bbl, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for December delivery ended -1% to $65.35/bbl, the lowest settlement values since May 30 and June 5, respectively.

Front-month November Nymex natural gas futures (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) settled +5.2% to $3.476/MMBtu, the highest since July 18, as BOK Financial said weather models have added as much as 17 heating-degree days, meaning that more natural gas is expected to be consumed than previously anticipated.

ETFs: (NYSEARCA:USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (NYSEARCA:UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG]), (NYSEARCA:XLE [https://seekingalpha.com/symbol/XLE])

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