Crude Prices Pressured by Risk-Off Sentiment as Stocks Tumble

Core Insights - Crude oil prices are experiencing downward pressure due to a selloff in the S&P 500 and signs of weakness in the US labor market, which negatively impacts economic growth and energy demand [1] - Reduced crude exports from Russia, geopolitical tensions, and a bullish crude crack spread provide underlying support for oil prices [2][3] Group 1: Market Dynamics - December WTI crude oil is down by 0.04 (-0.07%), while December RBOB gasoline closed down by 0.0246 (-1.24%) [1] - The S&P 500's decline to a one-month low has created a risk-off sentiment in asset markets [1] - The US labor market shows weakness, with an average loss of 2,500 jobs per week reported by ADP for the four weeks ending November 1 [1] Group 2: Supply Factors - Russia's crude exports have decreased to 3.36 million barrels per day (bpd) in the four weeks to November 16, down 90,000 bpd from the previous week, marking the lowest level in three months [2] - Ukraine's targeting of Russian refineries has reduced Russia's refining capacity by 13% to 20%, curbing production by as much as 1.1 million bpd [2] - New US and EU sanctions on Russian oil companies and infrastructure have further limited Russian oil exports [2] Group 3: OPEC and Production Outlook - OPEC revised its Q3 global oil market estimates from a deficit to a surplus, now projecting a surplus of 500,000 bpd, compared to a previous estimate of a -400,000 bpd deficit [4] - OPEC+ announced an increase in production by 137,000 bpd in December but plans to pause further hikes in Q1-2026 due to the emerging global oil surplus [5] - The IEA forecasts a record global oil surplus of 4.0 million bpd for 2026, with OPEC+ aiming to restore 2.2 million bpd of production cuts made in early 2024 [5]