Crude Oil Could Fall Below $50, BofA Warns

Core Viewpoint - Oil prices are experiencing a decline due to rising OPEC+ supply and increasing U.S.-China trade tensions, with Bank of America predicting Brent crude could fall below $50 per barrel in the near future [1][3]. Group 1: Oil Price Trends - As of midday trading, WTI crude was priced at $58.55 and Brent at $62.14, marking a decrease of approximately 5-6% since the beginning of October, reaching their lowest levels in five months [2]. - Natural gas prices have also dropped to $2.989 per MMBtu, continuing a week-long decline influenced by mild weather and steady production [2]. Group 2: Supply and Demand Dynamics - Bank of America analysts highlighted that increased supply from OPEC+ members, especially Saudi Arabia, Iraq, and the UAE, has led to a "persistent surplus" that could elevate inventories to levels not seen since 2020 [3]. - The International Energy Agency (IEA) has revised its demand growth outlook down to around 700,000 barrels per day for both 2025 and 2026, while also raising supply projections, indicating a larger-than-expected surplus [6]. Group 3: Geopolitical Influences - President Trump has reiterated threats of a "massive tariff expansion" on Chinese goods, which has contributed to market volatility amid weak industrial data from China and a stronger dollar [4]. - Traders are exercising caution ahead of the upcoming OPEC+ meeting, where discussions regarding the pace of output adjustments are anticipated [5].