Oil prices rose modestly on Thursday as market sentiment improved following three consecutive months of decline, with easing concerns over global oversupply providing limited support to crude benchmarks.
Brent crude oil, against which Nigerian crude oil is priced, increased by 24 cents or 0.38% to $63.76 per barrel at 08:53 a.m. in Nigeria, while U.S. West Texas Intermediate (WTI) crude oil gained 25 cents, or 0.42% to $59.85 per barrel.
The slight recovery comes after both benchmarks hit two-week lows in the previous session, pressured by weaker demand indicators and rising U.S. inventories.
Analysts said the latest price movement reflects cautious optimism among traders as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) signaled a pause in production increases early next year.
OPEC+ Production Adjustment Supports Market Sentiment
Oil prices have been under downward pressure in recent months due to fears of oversupply, following higher output from both OPEC+ and non-OPEC producers. The situation led to a third straight monthly decline in October.
However, the market began to stabilize toward the end of October after U.S. and British sanctions targeting Russia’s largest oil companies curbed some of the bearish momentum.
According to Haitong Securities, OPEC+’s decision to pause additional production increases in the first quarter of next year helped ease investor concerns over a sustained supply glut.
“Market sentiment shifted positively at the end of October as OPEC+ signaled restraint on further output growth,” Haitong said in a note. “This, combined with geopolitical sanctions, contributed to reduced oversupply expectations.”
Weak Demand Remains a Key Downside Risk
Despite the modest price recovery, concerns about weak demand continue to weigh on the global oil outlook. J.P. Morgan reported that global oil demand had risen by 850,000 barrels per day (bpd) so far in 2025—slightly below its earlier projection of 900,000 bpd growth.
“High-frequency indicators suggest that U.S. oil consumption remains subdued,” the bank noted, pointing to weaker travel activity and lower container shipments as signs of slowing demand in the world’s largest oil consumer.
The U.S. Energy Information Administration (EIA) added further pressure to the market earlier this week when it reported that U.S. crude inventories rose by 5.2 million barrels to 421.2 million barrels last week, far exceeding analysts’ expectations of a 603,000-barrel increase.
Analysts Maintain Bearish Medium-Term Outlook
While short-term sentiment has improved, some analysts remain cautious about the medium-term direction of oil prices.
Capital Economics maintained a bearish forecast, projecting Brent crude to average $60 per barrel by the end of 2025 and $50 per barrel by the end of 2026, citing persistent supply strength and sluggish global consumption.
“We think that downward pressure on oil prices will prevail,” Capital Economics said. “Supply remains strong, and demand growth has not accelerated enough to support sustained price recovery.”
Saudi Arabia Responds to Market Conditions with Price Cuts
In a move reflecting the current market dynamics, Saudi Arabia, the world’s largest crude exporter, cut its official selling prices for Asian buyers for December, signaling its response to the well-supplied global market.
Analysts said the adjustment aims to retain market share amid rising production from other OPEC+ members.
The pricing decision underscores how OPEC+ producers are balancing market stability with competitive positioning, as global inventories remain above average and demand growth continues to lag expectations.
Outlook
Crude prices are expected to remain volatile in the near term as markets weigh OPEC+ production strategies, geopolitical developments, and U.S. inventory trends.
The current rebound highlights cautious optimism, but underlying fundamentals suggest continued pressure on prices unless global demand strengthens meaningfully.
With OPEC+ adopting a conservative stance on output growth and non-OPEC supply expected to stabilize, analysts believe price movements will remain range-bound in the short term.