Crude oil prices experienced an upswing today, with January WTI crude oil rising by 1.06% to $59.06 per barrel and January RBOB gasoline closing up by 1.73% to $1.86 per gallon. This increase can be attributed to a decline in the dollar index, which reached a 1.5-week low, making energy commodities more attractive to international buyers. Additionally, ongoing uncertainties surrounding the conflict between Russia and Ukraine are bolstering crude prices as geopolitical tensions persist.
Russian President Vladimir Putin has not provided clear answers regarding U.S. President Joe Biden’s proposal for peace talks, while European Commission Vice President Ursula von der Leyen stated on November 29 that there are “no indications from Russia that they want peace.” This lack of clarity continues to sustain concerns about the potential for prolonged conflict, which has economic repercussions across global markets.
Market Dynamics and Production Outlook
Support for crude prices also stems from a report by Baker Hughes, indicating that the number of active U.S. oil rigs has fallen to a four-year low of 407 rigs. This decline suggests a potential reduction in U.S. oil production in the near term, which could place additional upward pressure on prices. Market watchers are keenly anticipating the upcoming virtual meeting of OPEC+ on December 3, where the expectation is that the group will maintain its decision to pause crude output increases in early 2026.
Recent data from Vortexa revealed that Russian oil product shipments decreased to 1.7 million barrels per day (bpd) in the first half of November, marking the lowest levels seen in over three years. The ongoing conflict has led Ukraine to target Russian refineries, with reports suggesting that Ukrainian operations have affected between 13% to 20% of Russia’s refining capacity, limiting the country’s ability to export crude effectively.
The imposition of new sanctions by the U.S. and the European Union on Russian oil companies and their infrastructure has further constrained Russia’s export capacity, adding to the global supply concerns.
Global Oil Supply and Demand Projections
Ongoing geopolitical risks, including a potential U.S. military buildup related to Venezuela, the world’s twelfth-largest oil producer, are also influencing oil prices. According to Vortexa, crude oil stored on tankers that have been stationary for at least seven days increased by 9.7% week-on-week to 114.31 million barrels, the highest level in two and a half years.
Earlier this month, OPEC revised its Q3 global oil market estimates from a projected deficit to a surplus, citing higher-than-expected U.S. production and an increase in OPEC output. The organization now anticipates a surplus of 500,000 bpd in global markets for Q3, reversing an earlier estimate of a 400,000 bpd deficit. The U.S. Energy Information Administration (EIA) has also raised its forecast for U.S. crude production in 2025 to 13.59 million bpd from 13.53 million bpd.
At its November 2 meeting, OPEC+ announced plans to increase production by 137,000 bpd in December but will pause further increases in the first quarter of 2026 to manage the emerging global surplus. The International Energy Agency (IEA) has projected a record global oil surplus of 4.0 million bpd for 2026.
As the situation evolves, industry stakeholders will closely monitor how these factors influence both supply and demand in the oil markets, particularly as geopolitical tensions continue to shape the landscape.
