Oil News: Bearish Oil Outlook Deepens with Rising Inventories and Weak Demand

Oil Slides Below Key Technical Support as OPEC+ Output Fears Mount

Light crude oil futures continued their decline Thursday, breaking below multiple technical support levels and extending a four-day losing streak. A bearish technical structure and concerns over rising global supply are pressuring prices lower, with traders watching for a possible test of deeper support zones.

At 10:24 GMT, Light crude oil futures are trading $61.49, down $0.29 or -0.47%.

OPEC+ Output Speculation Fuels Bearish Sentiment

Oil markets are under pressure as traders digest reports that OPEC+ may significantly boost output in November. According to sources familiar with the talks, the group could raise production by up to 500,000 barrels per day—triple the increase scheduled for October. Saudi Arabia is reportedly pushing for the increase in a bid to regain lost market share, adding weight to fears of oversupply.

Strategists warn that expectations of a supply surplus are already seeping into market sentiment. Jorge Montepeque of Onyx Capital noted that some banks, including Macquarie, are forecasting a potential “super glut” in crude markets, further discouraging bullish positions.

Technical Breakdown Points to More Downside

From a technical perspective, WTI crude is trading below the 200-day moving average ($63.06), the 50-day moving average ($63.56), and a long-term pivot at $64.21. This alignment underscores the bearish tone in the market. Prices have already broken below key swing bottoms at $61.61 and $61.34, exposing the September 5 low at $61.10 and the August 13 bottom at $60.77.

A confirmed break under $60.77 could trigger an acceleration toward the late May bottom at $55.74. That level would likely act as a major downside target for traders managing risk or building short-side exposure.

Geopolitical Tensions Offer Limited Support

While geopolitical risks are rising, they have yet to materially impact supply. The U.S. is now supporting Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, according to U.S. officials. This could eventually lead to disruptions in Russian crude flows, but analysts like UBS’s Giovanni Staunovo caution that absent real-time supply impacts, price support will be limited.

The Group of Seven’s latest vow to tighten restrictions on Russian oil purchases adds to the geopolitical backdrop, but traders remain focused on near-term fundamentals—namely, supply-demand balances and inventories.

U.S. Inventory Builds Reinforce Oversupply Narrative

U.S. Energy Information Administration data (EIA) showed crude inventories rose by 1.8 million barrels to 416.5 million barrels last week—well above consensus expectations. Gasoline and distillate stocks also rose, highlighting weaker refinery activity and softening demand.

Oil Prices Forecast: Bearish Bias Dominates as Support Breaks

The combination of rising inventories, OPEC+ supply risk, and technical weakness points to a bearish near-term outlook for crude oil. Unless geopolitical tensions translate into real supply disruptions, traders should expect further downside toward $60.77, and potentially $55.74 if that support fails to hold.

More Information in our Economic Calendar.