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Oil Prices Plunge Amid OPEC's Oversupply Warning
13 Nov
Summary
- Oil drops 4.2% to $58.50 per barrel
- OPEC says global supply exceeded demand by 500,000 barrels per day
- US crude production forecast raised to 13.58 million barrels per day by 2026
On November 13, 2025, oil prices experienced a significant decline, with West Texas Intermediate (WTI) falling by 4.2% to settle around $58.50 per barrel. This drop, the largest since June, came as a key market indicator flashed signs of weakness, and OPEC reported that global crude supplies had surpassed demand sooner than anticipated.
The US benchmark's nearest timespread briefly traded in a bearish contango structure, meaning current oil prices were cheaper than contracts for delivery further out, for the first time since February. This was seen as a fresh sign of the widely anticipated supply glut. OPEC revised its estimates for global oil markets, forecasting a surplus of 500,000 barrels per day in the third quarter, as US production exceeded expectations and the group itself accelerated output.
The weakening of timespreads and OPEC's outlook pointing to rising inventories have put pressure on crude prices. Additionally, the market lacks a clear bullish catalyst, with geopolitical risks having quieted and the macroeconomic backdrop not providing much support. Trend-following funds have also been selling positions, reinforcing the long squeeze in oil.
Looking ahead, the US Energy Information Administration has raised its daily 2026 US crude production forecast to 13.58 million barrels, up from 13.51 million previously. Analysts warn that a sustained break below $58.50 in the US benchmark's December contract may trigger further selling, as the oil market continues to grapple with concerns over a potential supply glut.
