Oil prices post back-to-back losses, settle at lowest since mid-July

The trade group reported late Tuesday that U.S. crude supplies for last week climbed by 11.9 million barrels, according to sources citing the data.

“The sharp jump in inventories could be the product of various forces, with demand fluctuations on the list,” Otunuga told MarketWatch. “Nevertheless, this report has added more fears around the demand side of the equation.”

Given how concerns remain elevated over China’s economic outlook and the sense of uncertainty around the Federal Reserve’s tightening cycle, oil may extend losses, he said.

Weekly petroleum-supply data from the Energy Information Administration has been delayed to next week due to a “planned systems upgrade.” The government agency will report two weeks’ worth of data on Nov. 15. Analysts at Macquarie forecast a 4.7 million-barrel rise in crude stockpiles for the week ending Nov. 3.

Weekly natural-gas supply data from the EIA, normally due out on Thursdays, will also be delayed to next week.

Crude-oil prices fell sharply Tuesday, with both WTI and Brent ending at their lowest since July 21 after a round of disappointing China economic data that raised questions about demand from the world’s largest oil consumer.

See: Why oil prices just dropped to their lowest since July

It feels as if “the path of least resistance is down, with the next support for the front-month WTI contract coming in around $75 per barrel,” David Morrison, senior market analyst at Trade Nation, said in a note.

“Having said that, oil is looking oversold at current levels, so the possibility of a bounce can’t be ruled out. Demand issues continue to be the driver of price, with concerns about economic weakness across China, the Eurozone and possibly the U.S. as well, all adding to downside pressure,” he wrote.

It isn’t all about demand. Supply concerns have also played a role as fears of a broadening of the Israel-Hamas war have faded, allowing crude to more than take back the risk premium built into prices after the Oct. 7 Hamas attack on Israel.

Russian seaborne crude oil exports have grown in recent months, which suggests that Russia is not sticking to its additional voluntary cut, said Warren Patterson and Ewa Manthey, commodity strategists at ING, in a note.

The weakness is “likely to lead to growing noise from OPEC+ and in particular from Saudi Arabia,” they said.

While Saudi Arabia and Russia confirmed that they would continue with their additional voluntary cuts through until the end of the year, “it is increasingly likely that they will extend this into the new year if this downward pressure continues,” Patterson and Manthey wrote.