Oil Price News: Crude Markets Turn Bearish After OPEC+’s Weak Supply Boost

OPEC+ delivered a much smaller supply increase (~137 kb/d) than the ~500 kb/d many had braced for, but the headline pop fights a tougher backdrop: onshore inventories are swelling (Vortexa/Kpler), signaling a near-term glut. Russia’s refinery outages and flip-flop on a diesel export ban are not crude-bullish—offline refining means less immediate crude demand—while a softer U.S. macro pulse (late NFP) adds downside risk. Net-net, any early-week relief rally looks vulnerable to a fade as shrinking OPEC+ “shock absorbers” collide with rising stocks. Tactically, the bias is to sell strength—with short calendar spreads favored—once price shows exhaustion.

Crude oil market outline

In brief, there are many voices in oil world, but price either goes up or down.

Bulls–The supply risk. It was reported, through the summer, that US drillers may be reaching the end of their tether. With dual headwinds of tariff led input costs-steel, consumables etc and fiscal discipline already capping new E&P. If you read the Dallas Fed quarterly survey and last week’s report, you would be of the mind that drillers are ready to tuck in their wings and wait for better dynamics.

Bulls have a lot to reference. Russia were mulling an export ban on diesel-then they weren’t. Their refinery attacks on the surface would appear to be a global upside catalyst, however this was priced in and then out 2 weeks ago.

At the end of the day, none of this transpired to be more than a nice seasonal bid ‘catalyst’. Not to mention the fact that Russian refiners going offline is actually bearish, given that if refineries are out, they are not buying crude.

Source: KPLER

Bears–Oversupply factors.

Source: HFI Research

The Real Story: Onshore Stocks Are Surging

Bulls, bears, I don’t care. There is only what IS. Price!

There is a glut of oil onshore around the world currently, as depicted in the chart below from the lovely people over at Vortexa. This is the bearish factor that I referred to in last week’s report. The build in onshore was sprouting. Well, it’s now about to bloom.

Tim, what’s all this flower analogy shit?

It’s bearish. The ‘What is’ narrative is bearish price in the near term.

Source: Vortexa

So yeah, I’m bearish. This coming week the market may well have a rally on the back of ‘‘Oh the OPEC+ production ramp up was much lower at 137kbpd than expected 500kbpd.’’ That trade is a false flag. They will probably initially buy it, only to sell it to new lows at the back end of the week. Notwithstanding headline geopolitical risk factors. NFP coming a week late on Friday is not going to paint a great employment picture. In my mind, we have seen oil price in negative economics U.S outlooks.

OPEC have little left to be able to actually hike. When the journalist of choice for OPEC tells you that out of 1.65mbpd target overall hike, all they got is 700kbpd, you believe her. So how are they going to do 500kbpd over 3 months? Tell me how, and I’ll eat my laptop. I’m planning on getting short cal spreads at some point this week. I would like a nice spicy overheated rally in front month oil in which to then take a position short. So this is a good omen for the week. Buy it up early in the week, sell it through to Christmas. Bring it.

Commitment of Traders report:

Due to the U.S government shutdown, we didn’t get a report last Friday. We look forward to a double edition this coming Friday, pending the shutdown is ended.

Trade idea

The narrative is dominated at the moment whereby the OPEC+ production hike is much softer than the falsely advertised 500k bpd. The relief has been seen this morning in the upside push. I am finding it hard to think that this rally will be sustained. Seasonally, I don’t see this move up lasting beyond the middle of the week, but I will wait for price to confirm exhaustion. I understand this is an extreme contrarian view.

WTI Front month oil. YVWAP.

Watch out for the downside

Conclusion: Oil’s Path of Least Resistance Is Lower

Near term, the path of least resistance is lower: swelling onshore inventories and muted OPEC+ additions outweigh headline geopolitics. Fade strength—especially any early-week squeeze—looking to express the view via short WTI calendar spreads or tactical sells into YVWAP/overbought signals. The setup is invalidated by sustained inventory draws or a genuine OPEC+ under-delivery; until then, shrinking “shock absorbers” + soft macro keep rallies sellable. Risk to the view: a major, durable supply outage that tightens prompt balances.