Crude Oil Extends Losses Amid Expectations Of Greater Global Supply

(MENAFN- Your Mind Media ) Crude oil prices recorded further losses on Tuesday, with WTI falling to around $62.00 per barrel and Brent trading near $65.64 per barrel. The decline, of more than 1%, reflects growing investor concerns about a potential supply surplus in the coming months.

The downward pressure intensified after reports that OPEC+ is considering increasing production in November by a range of 274,000 to 411,000 barrels per day, well above the adjustment implemented in October. Saudi Arabia, the group's leading exporter, is seeking to strengthen its market share and regain influence in an increasingly competitive environment.

Another key factor was the resumption of crude oil exports from Iraq's Kurdistan region to Turkey, which had been suspended for over two and a half years. This return to the market adds extra barrels at a time when demand is showing signs of weakness in several regions.

On the geopolitical front, markets are closely monitoring recent attacks on Russian refineries, which could disrupt refined product flows, although their impact has so far been limited. At the same time, the prospect of a potential peace agreement in Gaza could fully restore traffic through the Suez Canal, reducing the geopolitical risk premium built into crude prices.

At the macroeconomic level, attention is also focused on the political situation in the United States, where the risk of a government shutdown adds uncertainty to the economy and, consequently, to energy consumption. This is compounded by the industrial slowdown in Europe and Asia, which limits the outlook for a solid demand recovery.

Analysts point out that OPEC+'s strategy could have repercussions for U.S. shale producers. They face higher extraction costs and could see profitability shrink if international prices remain depressed for an extended period.

In this context, market participants are awaiting the release of weekly U.S. crude inventory data. These figures will be key in determining whether the downward trend deepens or if a technical rebound in prices occurs in the coming days.

In conclusion, the oil market is experiencing a period of marked volatility, driven by the interplay of supply dynamics, geopolitical risks, and indications of weakening demand. If OPEC+ proceeds with a significant production increase while key exports, such as those from Iraqi Kurdistan, normalize, crude oil is likely to remain under pressure in the short term. The trajectory of prices will largely depend on the evolution of global demand and producers' ability to balance their strategies in an uncertain environment."

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