Oil News: API and EIA in Focus as IEA Projects Oversupply, Demand Outlook Softens

WTI crude steady after sharp sell-off

Light crude oil futures were flat to slightly lower on Wednesday as traders attempted to stabilize the market following a steep multi-day sell-off. The current bounce began after prices hit a low of $57.68 on Tuesday, a sharp reversal from the October 8 peak of $62.92. While Wednesday’s session showed minor strength, the overall tone remains cautious.

At 10:53 GMT, Light Crude Oil Futures are trading $58.63, down $0.07 or -0.12%.

Technical pressure persists near key resistance levels

Price action suggests a modest recovery attempt, but upward momentum remains constrained. The next key resistance is at the $59.91 Fibonacci retracement level.

A break above this area could trigger short-covering rallies; however, traders remain wary of heavier resistance at the 50-day moving average at $62.53 and the 200-day moving average at $62.93.

Adding to the bearish bias, the 50-day has crossed below the 200-day — a classic technical warning of deeper weakness. On the downside, any renewed selling below $57.68 could open the door to a retest of $55.74.

IEA warns of looming supply glut

Fundamentally, bearish sentiment has been reinforced by the International Energy Agency’s (IEA) latest forecast. On Tuesday, the agency warned the global oil market could face a supply surplus of up to 4 million barrels per day in 2026 — a larger excess than previously projected — as OPEC+ and non-OPEC producers increase output while demand stagnates.

US-China tensions revive demand concerns

Geopolitical and economic risks are also pressuring sentiment. Trade tensions between the United States and China have flared in recent days, with both nations imposing additional port fees on cargo shipments.

These measures are expected to inflate freight costs, dampen economic activity, and weigh on oil demand.

Analysts from UBS and LSEG flagged that oil prices are now being shaped largely by macro risk sentiment and the extent of oversupply, with market participants closely tracking developments in global inventories.

Inventory build expected as traders await delayed reports

Ahead of key U.S. inventory data, early estimates suggest crude oil stockpiles rose by approximately 200,000 barrels last week, according to a Reuters survey. Gasoline and distillate stocks likely declined, but full clarity will come from the delayed American Petroleum Institute (API) report due Wednesday evening and official EIA figures on Thursday.

Bearish outlook as supply concerns dominate

With a weakening technical structure, persistent supply overhang projections, and renewed trade tensions between major consuming nations, the near-term outlook for oil prices remains bearish. Unless inventory data surprises to the upside or resistance levels are reclaimed convincingly, sellers are likely to retain control.

More Information in our Economic Calendar.