Oil prices came under pressure on Wednesday as fresh data indicating higher crude stockpiles in the United States raised renewed concerns about oversupply in the global market.
Brent crude oil, against which Nigerian crude oil is priced, lost 0.2% to trade at $64.78 per barrel, while U.S. West Texas Intermediate (WTI) crude oil slipped 0.2% to $60.65 per barrel in early trading.
According to market data obtained from the American Petroleum Institute (API), U.S. crude inventories increased by 4.45 million barrels for the week ended November 14, reinforcing the view that supply continues to exceed current consumption levels.
Gasoline inventories rose 1.55 million barrels, while distillate stockpiles climbed 577,000 barrels during the period.
Commodity analysts at ING stated that the inventory jump highlighted a bearish supply imbalance, although they noted investors remain attentive to broader geopolitical risks that could tighten the market.
The U.S. government recently imposed sanctions on major Russian oil producers including Rosneft and Lukoil, with a November 21 compliance deadline for companies to unwind their business dealings with the sanctioned entities.
The U.S. Treasury said the restrictions are already pressuring Russia’s oil revenues and are expected to reduce export volumes over time.
The sanctions have triggered adjustments in the crude sourcing strategies of major importers such as China and India, who have begun securing supply from alternative producers to avoid future disruptions.
Market analysts say the energy sector is being pulled in opposing directions:
A senior oil strategist at LSEG noted that benchmark prices remain range-bound as traders evaluate the extent of Russia-related supply tightening while navigating downward pressures tied to demand uncertainties.
Ukraine’s recent attacks on Russian refining and export infrastructure have added another dimension to supply risk sentiment, particularly in refined fuel markets.
European diesel margins have now reached their highest level since September 2023, supported by increased refinery spreads globally.
However, overall investor positioning remains cautious. Analysts project that global output continues to exceed demand, limiting the potential for sharp price rallies.
Attention now shifts to the U.S. Energy Information Administration (EIA) data, scheduled for release later on Wednesday.
A Reuters poll of analysts indicated that crude stockpiles are expected to show a 600,000-barrel draw, which, if confirmed, could provide some relief to current price softness.
The near-term trajectory of the oil market will depend on whether geopolitical disruptions outweigh rising commercial stock levels, as traders await clarity on supply flows heading into December.
