Crude Prices Tumble as EIA Crude Inventories Build

Core Insights - Crude oil and gasoline prices experienced a decline, with crude reaching a 2-week low due to unexpected increases in EIA crude supplies and a stronger dollar index [2][4] - Positive global economic indicators are supporting energy demand, with notable increases in US employment and service sector activity [3] Price Movements - December WTI crude oil closed down by $0.96 (-1.59%) and December RBOB gasoline closed down by $0.0135 (-0.70%) [1] - Crude prices retreated after a rise in EIA crude supplies, while gasoline inventories fell to an 11-year low, providing some support for gasoline prices [2] Economic Indicators - The US ADP employment change for October rose by 42,000, exceeding expectations of 30,000 [3] - The ISM services index increased by 2.4 points to 52.4, surpassing expectations and indicating the fastest expansion in 8 months [3] - Eurozone S&P composite PMI was revised upward to 52.5, marking the strongest expansion in nearly 2.5 years [3] - German factory orders rose by 1.1% month-over-month, higher than the expected 0.9% [3] Market Dynamics - The crude crack spread rose to a 2.5-month high, encouraging refiners to increase crude purchases for gasoline and distillate production [4] - Reports of potential US military action against Venezuela, a significant oil producer, are providing additional support for oil prices [4] OPEC+ Production Decisions - OPEC+ announced a production increase of 137,000 barrels per day (bpd) for December, with plans to pause further increases in Q1 2026 due to a projected global oil surplus [5] - The IEA forecasts a record global oil surplus of 4.0 million bpd for 2026, with OPEC+ aiming to restore a total of 2.2 million bpd cut in early 2024, leaving 1.2 million bpd yet to be restored [5] - OPEC's September crude production rose by 400,000 bpd to 29.05 million bpd, the highest level in 2.5 years [5]