Crude Prices Plummet Amid Global Turmoil: Russia Port Restart Fuels Risk-Off Sentiment
Crude Oil Prices Plummet Amid Decline in Stocks and Geopolitical Uncertainty
The December WTI crude oil (CLZ25) on Monday closed down -0.18 (-0.30%), while the December RBOB gasoline (RBZ25) closed down -0.0215 (-1.07%). The crude oil prices fell amidst a decline in stocks and concern about expected weak US economic reports due this week.
Oil prices were also influenced by Russia’s key oil export port of Novorossiysk, which reportedly resumed some operations after Ukrainian attacks last Friday. This development added to the pressure on oil prices as concerns over supply disruptions persisted. The market remained volatile, with investors taking a risk-off stance amid a decline in stocks and concern about expected weak US economic reports due this week.
Continued Support from Geopolitical Risks
Despite the overall bearish sentiment, crude oil prices had underlying support from continued geopolitical risks related to Russia. The seizure by Iran of an oil tanker in the Gulf of Oman last Friday added to the uncertainty surrounding global oil supply. Additionally, the US military buildup for a possible attack on Venezuela, which is the world’s 12th-largest oil producer, kept geopolitical risks elevated and supported crude prices.
Reduced crude exports from Russia have been supporting oil prices over the past few months. Ukraine has targeted at least 28 Russian refineries over the past three months, exacerbating a fuel crunch in Russia and limiting Russia’s crude export capabilities. Ukrainian drone and missile attacks on Russian refineries and oil export terminals curbed Russia’s total seaborne fuel shipments to 3.45 million bpd in the four weeks to November 9, down by -130,000 bbl from the prior week and the lowest in two months.
OPEC+ Announcement and Q3 Global Oil Market Estimates
The recent OPEC++ announcement had a mixed impact on crude prices. At its November 2 meeting, OPEC+ announced that members will raise production by +137,000 bpd in December but will then pause the production hikes in Q1-2026 due to the emerging global oil surplus. This development added to the pressure on oil prices as concerns over supply disruptions persisted.
The IEA in mid-October forecasted a record global oil surplus of 4.0 million bpd for 2026. OPEC’s October crude production rose by +50,000 bpd to 29.07 million bpd, the highest in 2.5 years. This increase in production contributed to the emerging global oil surplus and added pressure on crude prices.
US Oil Inventories and Production
Last Thursday’s EIA report showed that (1) US crude oil inventories as of November 7 were -4.1% below the seasonal 5-year average, (2) gasoline inventories were -4.0% below the seasonal 5-year average, and (3) distillate inventories were -7.9% below the 5-year seasonal average. US crude oil production in the week ending November 7 rose +1.5% w/w to a record high of 13.862 million bpd.
Vortexa Report and Baker Hughes Update
Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least 7 days rose +1.1% w/w to 103.41 million bbls in the week ended November 14, the highest level since June 2024. This increase in crude oil inventories contributed to the emerging global oil surplus and added pressure on crude prices.
Baker Hughes reported last Friday that the number of active US oil rigs in the week ending November 14 rose by +3 rigs to 417, modestly above the 4-year low of 410 rigs set on August 1. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022.
Conclusion
In conclusion, the recent decline in crude oil prices was driven by a combination of factors, including a decline in stocks and concern about expected weak US economic reports due this week. Geopolitical risks related to Russia, last Friday’s seizure by Iran of an oil tanker in the Gulf of Oman, and the US military buildup for a possible attack on Venezuela added to the uncertainty surrounding global oil supply.
The recent OPEC+ announcement had a mixed impact on crude prices, while the emerging global oil surplus and increase in production contributed to pressure on crude prices. The EIA report and Vortexa report provided additional information on US oil inventories and production, as well as the storage of crude oil on tankers. Ultimately, the continued support from geopolitical risks will likely be a key driver of crude prices going forward.
Note: This article was published for informational purposes only and is not intended to be taken as investment advice.
Crude Prices Plummet Amid Global Turmoil: Russia Port Restart Fuels Risk-Off Sentiment
Crude Oil Prices Plummet Amid Decline in Stocks and Geopolitical Uncertainty
The December WTI crude oil (CLZ25) on Monday closed down -0.18 (-0.30%), while the December RBOB gasoline (RBZ25) closed down -0.0215 (-1.07%). The crude oil prices fell amidst a decline in stocks and concern about expected weak US economic reports due this week.
Oil prices were also influenced by Russia’s key oil export port of Novorossiysk, which reportedly resumed some operations after Ukrainian attacks last Friday. This development added to the pressure on oil prices as concerns over supply disruptions persisted. The market remained volatile, with investors taking a risk-off stance amid a decline in stocks and concern about expected weak US economic reports due this week.
Continued Support from Geopolitical Risks
Despite the overall bearish sentiment, crude oil prices had underlying support from continued geopolitical risks related to Russia. The seizure by Iran of an oil tanker in the Gulf of Oman last Friday added to the uncertainty surrounding global oil supply. Additionally, the US military buildup for a possible attack on Venezuela, which is the world’s 12th-largest oil producer, kept geopolitical risks elevated and supported crude prices.
Reduced crude exports from Russia have been supporting oil prices over the past few months. Ukraine has targeted at least 28 Russian refineries over the past three months, exacerbating a fuel crunch in Russia and limiting Russia’s crude export capabilities. Ukrainian drone and missile attacks on Russian refineries and oil export terminals curbed Russia’s total seaborne fuel shipments to 3.45 million bpd in the four weeks to November 9, down by -130,000 bbl from the prior week and the lowest in two months.
OPEC+ Announcement and Q3 Global Oil Market Estimates
The recent OPEC++ announcement had a mixed impact on crude prices. At its November 2 meeting, OPEC+ announced that members will raise production by +137,000 bpd in December but will then pause the production hikes in Q1-2026 due to the emerging global oil surplus. This development added to the pressure on oil prices as concerns over supply disruptions persisted.
The IEA in mid-October forecasted a record global oil surplus of 4.0 million bpd for 2026. OPEC’s October crude production rose by +50,000 bpd to 29.07 million bpd, the highest in 2.5 years. This increase in production contributed to the emerging global oil surplus and added pressure on crude prices.
US Oil Inventories and Production
Last Thursday’s EIA report showed that (1) US crude oil inventories as of November 7 were -4.1% below the seasonal 5-year average, (2) gasoline inventories were -4.0% below the seasonal 5-year average, and (3) distillate inventories were -7.9% below the 5-year seasonal average. US crude oil production in the week ending November 7 rose +1.5% w/w to a record high of 13.862 million bpd.
Vortexa Report and Baker Hughes Update
Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least 7 days rose +1.1% w/w to 103.41 million bbls in the week ended November 14, the highest level since June 2024. This increase in crude oil inventories contributed to the emerging global oil surplus and added pressure on crude prices.
Baker Hughes reported last Friday that the number of active US oil rigs in the week ending November 14 rose by +3 rigs to 417, modestly above the 4-year low of 410 rigs set on August 1. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022.
Conclusion
In conclusion, the recent decline in crude oil prices was driven by a combination of factors, including a decline in stocks and concern about expected weak US economic reports due this week. Geopolitical risks related to Russia, last Friday’s seizure by Iran of an oil tanker in the Gulf of Oman, and the US military buildup for a possible attack on Venezuela added to the uncertainty surrounding global oil supply.
The recent OPEC+ announcement had a mixed impact on crude prices, while the emerging global oil surplus and increase in production contributed to pressure on crude prices. The EIA report and Vortexa report provided additional information on US oil inventories and production, as well as the storage of crude oil on tankers. Ultimately, the continued support from geopolitical risks will likely be a key driver of crude prices going forward.
Note: This article was published for informational purposes only and is not intended to be taken as investment advice.