Brent crude extended its slide on Thursday, drifting toward the $59-a-barrel mark as new data added to growing concerns that the global oil market is awash with supply.
The International Energy Agency has maintained that output is set to outstrip demand this year, even after slightly raising its demand growth forecast. That view was reinforced by fresh figures from the United States, where crude inventories climbed far more than expected.
Data from the Energy Information Administration showed stockpiles rising by 3.6 million barrels in the week ended January 16, well above market expectations for a 1 million barrel build.
Signs of easing supply constraints elsewhere also weighed on prices. Export disruptions in Kazakhstan appear close to being resolved, with repairs at key Black Sea loading facilities nearing completion.
Meanwhile, India’s Reliance Industries has stepped up purchases of Russian crude, easing concerns that U.S. sanctions could limit supplies to one of the world’s biggest oil-importing countries.
Geopolitics offered little support. Reports of a possible ceasefire between Russia and Ukraine, including talk of a trilateral meeting involving the United States, improved the supply outlook and added to the market’s cautious tone.
Altogether, rising inventories, loosening supply bottlenecks and diplomatic progress have kept oil prices under pressure, fuelling worries that the market will struggle to soak up excess barrels in the weeks ahead.
