On November 12th, the international crude oil market experienced a significant drop, becoming a focal point event in the recent energy market. As of the close of the day, WTI crude oil futures for December delivery on the New York Mercantile Exchange fell $2.55 to $58.49 per barrel, a drop of 4.18%; The Brent crude oil futures price for January delivery in London fell by $2.45 to $62.71 per barrel, a decrease of 3.76%. Among them, WTI crude oil not only fell below the $60 integer mark, but also hit a new low in price since October 23. This wave of decline is in sharp contrast to the previous trading day's 1.5% -1.7% increase. The core that triggered this oil price shock was the monthly crude oil market report released by the Organization of the Petroleum Exporting Countries (OPEC) in November. The most crucial shift in this report is the fundamental reversal in its assessment of the global oil market supply and demand pattern. Previously, OPEC had been predicting that the global oil market would face a supply shortage in 2026, but this report directly adjusted the expectation to that the global oil supply would be equal to the demand in 2026, marking its official shift from predicting a "tight supply" to recognizing that the market has entered a state of overcapacity. The report further points out that as OPEC+continues to expand its production scale, coupled with the accelerated release of energy from non OPEC oil producing countries such as the United States, Brazil, and Canada, the global oil supply side has strong growth momentum. Data shows that the current situation of oversupply in the global crude oil market has gradually emerged. In the third quarter of 2025, the daily average global oversupply reached 3.7 million barrels, a new high since the outbreak of the pandemic in 2020. The shale oil production in the United States even climbed to a historical peak of 13.6 million barrels per day. These data confirm OPEC's judgment on oversupply and raise market concerns about future supply-demand imbalances. The market reacted strongly to OPEC's statement, and panic selling quickly spread. Phil Flynn, senior analyst at Price Futures Group, bluntly stated that the market attaches great importance to OPEC's statement this time, and the prospect of supply-demand balance and even surplus has become a key factor triggering the decline in oil prices, even surpassing the optimistic forecast of the International Energy Agency (IEA). It is worth mentioning that the IEA also predicted in its World Energy Outlook released at the same time that oil demand would continue to grow until 2050, but this view did not reverse market sentiment. Investors are more inclined to believe in OPEC's judgment of the current supply and demand pattern, further amplifying the selling behavior.However, the current market is not without supporting factors. The healthy inventory of refined oil and the strong price difference in cracking provide a certain buffer for the weak demand for crude oil. In terms of inventory, Singapore's onshore residual fuel oil inventory rose to 24.781 million barrels as of the week ending October 29th, setting a new high in nearly two weeks and consistently exceeding the weekly historical average of 22 million barrels; Although the inventory of finished products such as gasoline and distillate oil in the US market has fluctuated, it is generally within a reasonable range compared to the five-year average, and there has been no extreme situation of inventory backlog or shortage. This stable inventory state avoids excessive weakness on the demand side. At the same time, the strong cracking price difference means that refineries have considerable profit margins for processing crude oil into finished oil, which will encourage refineries to maintain stable crude oil processing volume and indirectly support crude oil demand. Despite the aforementioned supporting factors, most market institutions and analysts still hold pessimistic expectations for the future trend of crude oil prices. From a technical perspective, since April this year, US crude oil has been fluctuating above $54.16, and the current market is moving towards the lower limit of the oscillation range. The target price for this round of decline is even estimated to be between $51-53, and we need to be alert to the breakdown of the support level at $54.16. In addition, although OPEC+has decided to suspend its production increase plan for the first quarter of 2026, the previous increase has injected a large amount of supply into the market, and oil producing countries such as the United States are still taking the opportunity to expand their market share. The new sanctions imposed by the United States on Russian companies such as Lukoil on November 21st are about to take effect, and the market supply and demand pattern may further adjust, but the main trend of oversupply in the short term is difficult to change. Subsequently, the OPEC+production policy evaluation meeting on November 30th will become an important observation window, and the overall trend of sustained pressure on oil prices amidst fluctuations is likely to run through the international energy market in the near future.

Author of this news: Ding Shuhan

Date: November 14th, 2025