Oil prices reached $90.5 a barrel in early trading today, after falling below $90 yesterday. Expectations for improved oil supply in the Middle East and negative data on U.S. oil reserves had contributed to the price drop, but ongoing uncertainties regarding international tensions, especially concerning Iran and the U.S., continue to support prices.
Increase in U.S. Oil Reserves
API data shows that U.S. crude oil inventories increased by 9 million barrels last week, while a decrease of about 600,000 barrels was expected. Additionally, oil reserves in Cushing rose by 182,000 barrels to 39.5 million barrels. Gasoline inventories remained largely unchanged, while light distillate inventories saw an increase of 1.5 million barrels. Attention is now focused on the official EIA data to be released today.
Continued Growth in Oil Production in the U.S. and the Middle East
The EIA has slightly reduced its forecasts for U.S. crude oil production in 2026 to 13.86 million barrels per day, which is still 200,000 barrels higher than last year. The forecast for 2027 remains at 14.3 million barrels per day, indicating an approximate growth of 440,000 barrels per day. Additionally, oil demand in the U.S. is expected to remain stable at around 20.6 million barrels per day for the current year, increasing to 20.9 million barrels per day by 2027.
In the Middle East, ADNOC has indicated a potential decrease in the price of Murban crude for loading in December to $4 a barrel, reflecting improved supply conditions in the region. The EIA expects that most oil production in the Middle East, except for Iran, will return to pre-crisis levels by mid-2027.
However, risks related to oil supply have not disappeared. Reports indicate further damage to Russia's energy infrastructure due to drone attacks from Ukraine, adding more uncertainties.
Currently, developments in the Strait of Hormuz remain a key factor in the oil market, and improved regional flows could help reduce price volatility.
