Oil prices came under renewed pressure on Thursday after data from the American Petroleum Institute (API) showed a 1.3 million-barrel increase in U.S. crude inventories for the week ended November 7.
The inventory build amplified concerns that the global oil market remains adequately supplied despite slowing demand growth across major consuming regions.
Brent crude oil, against which Nigerian crude oil is priced, traded at $62.71 per barrel in early morning deals after a sharp 3.8 percent decline in the previous session. West Texas Intermediate slipped to $58.46 per barrel, extending Wednesday’s 4.2 percent drop as traders reacted to fresh signals of rising inventories and a more bearish supply outlook.
The latest API report indicated that while gasoline and distillate stockpiles fell, the crude build overshadowed those declines.
The data offered further evidence that the market may face sustained oversupply conditions as production growth accelerates in the United States and within OPEC+.
Market sentiment weakened further on Wednesday after the Organization of the Petroleum Exporting Countries released a revised outlook showing that global oil supplies are expected to exceed demand in 2026.
The shift marked a departure from earlier projections of a tight market and supported expectations of a potential surplus if production increases continue at the current pace.
Analysts noted that OPEC’s latest assessment, combined with rising U.S. inventories, has reinforced bearish positioning across the oil market.
Prices have been declining for three consecutive sessions as traders reassess the balance between supply growth and near-term demand prospects.
The U.S. Energy Information Administration is expected to release its official inventory report later on Thursday.
The agency’s Short-Term Energy Outlook this week also projected that U.S. crude output will reach a higher record than previously forecast, adding pressure to an already softening market.
According to the EIA, global oil inventories are likely to expand through 2026 as production continues to outpace demand for petroleum fuels.
The projection aligns with broader expectations that supply-side pressure will shape price movements in the medium term as producers maintain output growth despite limited signs of strong demand recovery.
Some analysts, however, argue that the recent sell-off may be overstated. They believe the decline reflects market sensitivity to revised forecasts rather than a significant shift in underlying fundamentals.
According to DBS Bank, oil prices are expected to find support around the $60 per barrel level, particularly as upcoming sanctions on Russian exports could disrupt short-term supply flows.
The combination of rising U.S. inventories, a more cautious OPEC outlook, and projected increases in global production continues to weigh on market sentiment.
With traders awaiting additional data from the EIA, the short-term outlook remains pressured as crude futures hover near multi-week lows.