Oil Prices Plummet on Global Supply-Demand Concerns
On Wednesday, the prices of major oil benchmarks experienced a significant decline, marking their worst drop in nearly a month. This downturn is attributed to the anticipation of continued growth in oil supply, which could put downward pressure on prices.
The Brent crude futures closed with a decrease of $2.55, or 4.18%, at $58.49 per barrel—its lowest point since October 21, when it closed at $57.24.
Meanwhile, the West Texas Intermediate (WTI) crude fell by $2.45, or 3.76%, to $62.71 per barrel, also reaching its lowest close since October 22 at $62.59.
The Mexican export blend settled at $55.94 per barrel, down $2.10, or 3.62%.
All three benchmarks recorded their steepest declines since October 10, with WTI dropping 4.24%, Brent falling 3.82%, and the Mexican blend declining by 4.17%.
Year-to-date, oil prices have shown a decrease of 16.65% for WTI, 15.98% for Brent, and 15.54% for the Mexican blend.
Expert Analysis and OPEC Projections
Felipe Mendoza, an analyst at ATFX LATAM, commented on the substantial drop in oil prices amid renewed pessimism about the global supply-demand dynamics.
“The downward movement comes after OPEC revised its projections, anticipating that the balance between production and consumption might be achieved by 2026, suggesting a scenario without short-term supply deficits. This shift in perspective weakened expectations for sustained price increases,” Mendoza explained.
He further noted that the market continues to face an oversupply environment, with relatively high inventories and unclear signs of a significant demand acceleration, particularly from Asia. This situation pushes prices downward.
Monex Casa de Bolsa experts added that despite US sanctions on major Russian oil producers and a recent trade agreement between the US and China, factors that should support crude futures, oil prices have deepened their decline in recent weeks due to the expectation of an oversupply scenario in 2026.
“In the third quarter alone, global oil supply surpassed demand by 500,000 barrels daily, according to OPEC, as US production exceeded expectations and the group itself accelerated its output,” they stated.
Expectations for 2026
According to the latest report, OPEC members reduced crude production by 73,000 barrels per day (bpd), signaling the first signs of moderation after months of consistent increases.
This adjustment comes amid fears that supply might outpace demand (reflected in the group’s decision to pause increases in the first quarter of the following year).
The US International Energy Agency forecasted in its annual report, Global Energy Perspectives, that global oil inventories would increase by 2.6 million barrels in 2026, up from 1.8 million barrels in 2025.
“By year-end, the outlook for the oil market points towards a trend of correction or downward stability,” ATFX Education analysts affirmed.
Besides international organization estimates, another factor is at play: the persistent political and fiscal uncertainty in the US, a significant oil consumer. This element adds an additional layer of risk that could dampen short-term energy consumption dynamics, according to experts.
Oil Companies’ Stock Performance
The shares of major oil companies listed on the stock market experienced losses during Wednesday’s mid-week trading session, influenced by the decline in international oil prices.
On Wall Street, Chevron suffered the most significant drop of 1.87% to $153.32, followed by ConocoPhillips with a 1.79% decline to $89.07. Exxon Mobil came in third with a 1.37% loss to $118.14, and Williams fell 0.28% to $60.43.
Internationally, oil companies also displayed erratic performance. Equinor of Norway fell 1.81%, BP of the UK dropped 1.74%, and Shell descended 0.95%. Spain’s Repsol experienced a 0.83% decline.
Conversely, PetroChina’s stocks in China rose 1.74%, and Saudi Aramco shares from Saudi Arabia saw a marginal increase of just 0.08%.
