Oil prices continued to slide on Tuesday, extending a multi-day decline driven by rising U.S. crude inventories, broad-based risk-off sentiment, and a stronger dollar. The selloff deepened as traders assessed weaker demand signals and ongoing uncertainty over global growth, pushing Brent crude closer to the $79 per barrel mark — its lowest level in nearly two months.

U.S. Inventories Add Pressure to Crude Benchmarks

According to data from the American Petroleum Institute (API), U.S. crude stockpiles rose by roughly 3.2 million barrels last week, far exceeding market expectations. The buildup, concentrated in Cushing, Oklahoma — the delivery point for West Texas Intermediate (WTI) — suggested softening refinery demand and a potential slowdown in export flows.

The Energy Information Administration (EIA) is set to release its official data later this week, which could confirm a sustained oversupply trend heading into winter. If inventories continue to climb, analysts say it could delay any meaningful rebound in prices, particularly as global demand projections are revised lower by major agencies.

Global Selloff Adds to Commodities Weakness

The broader financial market downturn has amplified oil’s losses. U.S. equities fell sharply this week, with the Nasdaq down over 2%, as investors rotated out of risk assets ahead of key economic releases. A stronger U.S. dollar — up 0.3% against major peers — made commodities priced in dollars more expensive for international buyers, further dampening demand.

Meanwhile, refining margins in Asia have narrowed, with Singapore’s benchmark refining profit margin slipping below $7 per barrel, its weakest in months. This has raised concerns about reduced crude purchasing by regional refiners, particularly in China and South Korea, both key drivers of global oil consumption.

OPEC+ Stance and Geopolitical Factors in Focus

Attention is now shifting toward the upcoming OPEC+ ministerial meeting, where the group will decide whether to extend or adjust current output targets. Recent signals suggest a cautious stance, with Saudi Arabia and Russia both emphasizing supply discipline amid volatile macroeconomic conditions. However, market participants remain wary that higher U.S. output — now nearing 13.3 million barrels per day — could offset any coordinated cuts.

Geopolitical risks also continue to shape sentiment. Tensions in the Middle East remain elevated, but without direct supply disruptions, risk premiums in the oil market have remained muted. Analysts note that traders are prioritizing economic fundamentals over geopolitical uncertainty for now.

Outlook: Demand Headwinds and Data-Driven Volatility

Looking ahead, the market’s focus will turn to U.S. inflation and employment data later this week, which could influence the Federal Reserve’s policy outlook and, by extension, the dollar’s trajectory. Any signs of slowing demand or persistent oversupply could push Brent below $78 per barrel, testing technical support levels.

For investors, the coming weeks will be crucial in determining whether oil’s recent weakness represents a short-term correction or the start of a broader downtrend tied to macroeconomic cooling. OPEC+ decisions and U.S. inventory trends will likely set the tone for global energy markets heading into year-end.