Possible Easing of Geopolitical Risks Weighs on Crude Prices

Core Insights - Crude oil and gasoline prices have decreased due to hopes for a resolution to the Russian-Ukrainian war, which could lead to increased global oil supplies as restrictions on Russian energy exports may be lifted [1] - Russian geopolitical tensions and military threats are providing support for crude oil prices, despite the overall downward trend [2][5] - Recent data indicates a significant rise in crude oil stored on stationary tankers, reaching the highest level in nearly 2.5 years [3] Supply and Demand Dynamics - OPEC has revised its Q3 global oil market estimates from a deficit to a surplus, now projecting a surplus of 500,000 barrels per day (bpd) due to higher-than-expected US production and increased OPEC output [4] - The US Energy Information Administration (EIA) has raised its 2025 US crude production estimate to 13.59 million bpd, up from 13.53 million bpd [4] Geopolitical Factors - Venezuelan geopolitical risks are contributing to the support of crude prices, following statements from President Trump regarding the airspace over Venezuela [5] - Reduced crude exports from Russia are also underpinning crude prices, with shipments falling to 1.7 million bpd in early November, the lowest in over three years [6] - Ukraine's military actions have targeted Russian refineries, knocking out 13% to 20% of Russia's refining capacity and limiting crude export capabilities [6]