Oil’s Global Oversupply Shows Up Most Prominently in US Market

Core Insights - Global crude oil markets are experiencing an oversupply, particularly evident in the Americas, especially the US [1] - The futures curve for US benchmark West Texas Intermediate indicates weaker demand for immediate barrels, with a contango structure expected for most of 2026 [1] - High export volumes in the US, with October crude exports reaching the highest level since July 2024, further indicate healthy supply [1] Supply and Demand Dynamics - The global marker Brent's futures curve is largely flat post-March, reflecting a lackluster demand for prompt barrels [2] - The Brent-Dubai EFS has turned negative, suggesting Brent is trading at a discount against the Middle Eastern benchmark, indicating weakness in North Sea markets [3] Future Market Expectations - Market analysts anticipate a global oil glut in the coming year, with OPEC revising its outlook from a deficit to a surplus due to increased US production [4] - The International Energy Agency forecasts a record surplus in 2026, indicating a significant shift in market dynamics [4] - Analysts predict a slight surplus in the current quarter and into the next, with expectations of continued contango in the forward curve, though not a deep contango [5]