Crude oil turns lower on stronger dollar, oversupply worries

[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 fell Tuesday after recording gains in the previous four sessions, with the U.S. dollar strengthening and risk assets turning broadly lower.

The dollar rose to a three-month high, driven by reduced expectations for further interest rate cuts this year; a stronger U.S. currency makes dollar-priced assets such as oil more expensive to those holding other currencies.

Investors continue to digest OPEC's decision to pause production increases for next year's Q1, marking the cartel's first pause since it started unwinding output cuts in April, a move it attributed to seasonal factors, but some market observers believe it may also reflect growing concerns about a supply surplus.

The OPEC+ decision is an added sign that the group wants to regain market share in a "long and shallow price war" without sinking the market, showing "the group does not want to risk creating an oil glut that sends prices crashing below $50/bbl," Bank of America's Francisco Blanch said in a note.

The market share battle will stretch out as curbing high-cost producers' output will take time with Brent in the $60s area, while a bonus is that it could make oil more competitive over time with natural gas and other fuels, "helping petroleum retain or even improve its share in the global energy mix," Blanch added.

Investors also are monitoring developments in Russia, as U.S. sanctions and Ukraine drone attacks against energy infrastructure add uncertainty to the supply situation.

Russia's seaborne crude shipments have declined sharply [https://www.bloomberg.com/news/articles/2025-11-04/russia-s-crude-deliveries-plunge-as-us-sanctions-begin-to-bite], dropping by the most since January 2024, according to vessel tracking data compiled by Bloomberg, as the latest sanctions led key buyers to avoid Russian oil.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for December delivery finished -0.8% to $60.56/bbl, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for January delivery settled -0.7% to $64.44/bbl, but front-month Nymex December natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) gained for the fifth straight session, closing +1.8% to $4.343/MMBtu.

ETFs: (USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (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]), (XLE [https://seekingalpha.com/symbol/XLE])

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