Oil prices extended a run of listless trading as traders awaited U.S. inventory data and assessed a persistent outlook for oversupply that continues to weigh on market sentiment.

West Texas Intermediate (WTI) was slightly higher near $61 per barrel, with prices fluctuating within a narrow $2 range since early last week as investors grappled with conflicting signals on supply and demand fundamentals.

U.S. Stockpiles Rise, Fuel Inventories Decline

According to the American Petroleum Institute (API), U.S. crude inventories rose by 6.5 million barrels last week, which would mark the largest increase since July if confirmed by official data later Wednesday. In contrast, fuel inventories declined, reflecting the uneven balance between production and consumption across the energy market.

The upcoming release of Energy Information Administration (EIA) data will be closely monitored for confirmation of API’s figures. A substantial build in crude stocks could reinforce the market’s bearish tone, particularly as global supply continues to outpace demand.

Analysts note that refiners have been scaling back activity amid soft margins and rising export competition, particularly from Asia, where cheaper Russian crude continues to find buyers despite Western sanctions.

OPEC+ Output and Oversupply Fears Pressure Market

Brent crude has fallen roughly 13% this year, pressured by rising production from both OPEC+ and non-member producers such as the United States, Brazil, and Canada. The head of commodities trading firm Mercuria warned at the Adipec conference on Wednesday that oversupply in the global oil market is already forming and could reach as much as 2 million barrels per day in 2026.

“Currently, several opposing factors appear to be keeping oil prices within a narrow range,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. He pointed to the combination of U.S. stockpile trends, OPEC+ policy moves, and Western sanctions on Russia as key elements influencing price direction.

These crosscurrents have prevented oil from breaking decisively higher or lower, leaving traders searching for a catalyst — whether from renewed geopolitical tensions, shifts in production targets, or a surprise in U.S. demand trends.

India’s Refiners Add a New Variable

In a sign of shifting trade dynamics, India’s Reliance Industries, typically one of the world’s largest crude buyers, reportedly sold a shipment of Iraqi oil to a European refiner. While the reasons remain unclear, analysts said the move could signal changing procurement strategies among Asian refiners following recent U.S. sanctions on Russia’s two largest oil producers.

The sanctions have raised questions about whether Indian refiners will scale back purchases of Russian crude, which has become a vital part of their supply mix since the start of the Ukraine war. Any significant reduction in India’s Russian oil intake could alter global trade flows, potentially providing limited short-term support for Brent and WTI benchmarks.

Forward-Looking Outlook: Tight Range May Persist as Market Awaits Clarity

Looking ahead, traders expect oil to remain range-bound until a clearer signal emerges from supply data or OPEC+’s next policy meeting. Persistent oversupply fears, coupled with sluggish global demand and uncertainty around the pace of economic recovery, suggest that the market could remain capped in the near term.

However, geopolitical developments, refinery run rates, and winter fuel demand patterns will remain critical factors to monitor. A sustained drawdown in inventories or an unexpected production cut by OPEC+ could quickly shift sentiment, but for now, oil appears locked in a balancing act between ample supply and fragile demand.