Oil prices extended their decline during Wednesday's Asian session as a global selloff in financial markets intensified concerns about slowing economic and fuel demand growth, while a stronger U.S. dollar and signs of rising crude inventories added further pressure.
By 3 pm AEDT (4 am GMT), Brent crude futures slipped 8 cents, or 0.1%, to $64.36 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 19 cents, or 0.2%, to $60.44.
Both benchmarks extended losses of 0.7% and 0.8%, respectively.
The weakness in oil markets mirrored the broader retreat in risk assets, as Asian equity markets followed Wall Street lower amid mounting worries that valuations, particularly in artificial intelligence-linked stocks, have become overstretched.
The risk-off sentiment pushed the U.S. dollar higher against major peers, further dampening demand for dollar-priced commodities such as crude.
ANZ analysts noted that the International Energy Agency (IEA) expects a “record glut” of oil to emerge early next year, reflecting weaker demand growth and sustained output.
“Recent U.S. sanctions on Russian oil companies provided some relief”, analysts noted, citing ship-tracking data showing that Russia’s seaborne crude shipments fell by the most since January 2024, with a four-week average of 3.58 million barrels per day for the period ending 2 November.
Adding to the bearish tone, data from the American Petroleum Institute (API) showed U.S. crude inventories increased by 6.5 million barrels for the week ending 31 October, versus expectations of a 2.4 million barrel draw.
Supply-side factors also weighed on sentiment after the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, confirmed plans on Sunday to raise output by 137,000 barrels per day in December, signalling confidence in production capacity even as demand forecasts soften.
Traders are now looking toward fresh data from the U.S. Energy Information Administration later this week.
