Brent Heads for Nearly 2% Weekly Loss as Signs of Supply Surplus Widen

Key Facts

Brent crude was on track for a nearly 2% weekly loss in the week ended November 13, amid mounting signs of a supply surplus, according to a Reuters report published that day. Crude had fallen 16% in the previous week, extending the decline into a second week. EL7 data showed Brent closing at $95.84 a barrel on November 13, compared with $95.82 in the previous session. The report quoted an analyst as saying, "The market's biggest concerns now appear to be related to the surplus." Market focus has shifted from worries about supply shortages to the possibility that available volumes will exceed demand.

U.S. commercial crude inventories rose 4.7 million barrels to 414.4 million barrels in the week ended November 6, according to data from the Energy Information Administration. Inventories increased 1.1% from the previous week but remained 3.1% below their level a year earlier. Gasoline inventories also rose 1.8 million barrels to 210.8 million barrels, up 0.9% week on week and 2.8% year on year. Distillate inventories climbed 4.1 million barrels to 103.3 million barrels in the same week. These increases offer a broader picture of the build in U.S. petroleum products alongside the rise in crude inventories.

Globally, the International Energy Agency said supplies rose 3 million barrels per day in September, then increased by a further 2.3 million in October to reach 105.4 million barrels per day. The agency said the increase came despite ongoing attacks on energy infrastructure and tankers. At the same time, it forecast that global oil demand would fall by 2.7 million barrels per day in 2026 to 102.3 million. It expects demand to rebound by 2 million barrels per day in 2027. The estimate combines October's supply growth with an expected contraction in demand during the year, both factors in the supply-surplus debate.

The agency estimated that observed oil inventories rose 52 million barrels in October, the first increase since June. Oil held at sea increased by 86 million barrels during the month, according to its report. The report also said North Sea Dated crude fell 32% from a peak of $136 a barrel in early October to $93 at the time the report was prepared on November 13. The agency linked the price decline to improved Gulf exports. These figures show observed inventories widening as the benchmark price cited in the report fell, despite continued infrastructure and transport disruptions.

Risks to oil shipments through the Strait of Hormuz remained in the market's background, according to the Reuters report. It said Iran's military reported that four oil tankers were hit by explosions in the waterway on Thursday after ignoring warnings, but Reuters could not immediately verify the account. The report, in contrast, said Washington's focus on a blockade of Iran had eased concerns about renewed fighting. It did not say shipping risks had disappeared, but kept them among the factors the market is monitoring. This came as the supply surplus emerged as traders' biggest concern, according to those quoted by Reuters.

In its price outlook, the U.S. Energy Information Administration said it expects Brent to average about $100 a barrel during November and December 2026, amid ongoing constraints. It also forecast that global inventories would begin to rise in the fourth quarter of 2026. Under the same scenario, average inventories could increase by 3.5 million barrels per day in the first half of 2027. The agency said this path could push Brent below $90 a barrel in the second quarter of 2027. These figures are part of the agency's forecasts, alongside its near-term estimate for the average price in November and December.

The November 16 agenda includes a speech by Federal Reserve Chair Kevin Warsh at 12 p.m. local time, during the Productivity and Jobs team conference in San Francisco. The U.S. Commodity Futures Trading Commission's schedule lists the same day as the rescheduled release date for the Commitments of Traders report. These reports are usually released at 3:30 p.m. Eastern time and include data from the previous Tuesday. The two dates follow a week in which the market focused on growth in supplies and inventories. The speech and the report are among the day's key scheduled events.