Crude Prices Tumble on Signs of Robust Global Oil Supplies

Core Viewpoint - Crude oil prices are experiencing volatility due to geopolitical factors, changes in U.S. sanctions on Venezuela, and varying demand forecasts, leading to a potential surplus in the global oil market. Group 1: Price Movements - February WTI crude oil closed down by $1.14 (-2.00%) and February RBOB gasoline closed down by $0.061 (-0.36%) on Wednesday [1] - Crude prices fell to a two-week low following the U.S. lifting some sanctions on Venezuelan crude exports [1][3] Group 2: Supply and Demand Dynamics - The U.S. Energy Department announced selective rollback of sanctions to facilitate Venezuelan crude transport, potentially increasing global oil supplies [3] - Saudi Arabia cut the price of its Arab Light crude for February delivery for the third consecutive month, indicating concerns about energy demand [3] - Morgan Stanley revised its crude price forecasts downward for Q1 to $57.50/bbl and Q2 to $55/bbl, anticipating a growing global oil market surplus [4] Group 3: Inventory and Import Data - Weekly EIA crude inventories fell more than expected, providing some support for crude prices [2] - China's crude imports are projected to rise by 10% month-over-month in December to a record 12.2 million bpd as it rebuilds inventories [5] - Crude oil stored on stationary tankers decreased by 3.4% week-over-week to 119.35 million bbl [4] Group 4: OPEC+ Actions - OPEC+ confirmed plans to pause production increases in Q1 of 2026, despite a prior announcement to raise production by 137,000 bpd in December [6] - 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 [6]