Oil Takes It On The Chin Again As Glut Fears Intensify

But ADNOC's stance is that demand will be huge through 2040: File Image/Pixabay

Wednesday’s oil trading seemed to confirm that concerns over a possible global glut are relentless, even though some analysts have doubted its veracity: a big build in U.S. crude stocks stoked these fears and caused a drop in prices for the commodity of over 1 percent.

Brent settled down 92 cents, or 1.4 percent, at $63.52 per barrel, and West Texas Intermediate settled down 96 cents, or 1.5 percent, at $59.60.

The Energy Information Administration reported that crude stockpiles last week rose by 5.2 million barrels to 421.2 million barrels, compared with expectations for a 603,000 barrel rise.

Completely overlooked was a massive draw in gasoline stockpiles: to the tune of 4.7 million barrels last week to 206 million barrels, compared with expectations for a 1.1 million draw.

Two additional factors were said to have spooked traders on Wednesday: the latest Canadian budget, which contained provisions for scrapping a cap on oil and gas emissions, which presumably could clear the way for increased production of crude for export; and the aftermath of the Organization of the Petroleum Exporting Countries (OPEC) earlier deciding to increase output by 137,000 barrels per day next month (although it also decided to pause further increases in the first quarter of 2026).

Wednesday’s trading motivations were somewhat ironic considering that earlier this week, Suhail Al Mazrouei, energy minister for the United Arab Emirates, said at the Adipec energy conference, “I’m not going to talk about an oversupply scenario; I can’t see that…And I think all of what we are seeing is more demand.”

Indeed, on Wednesday, Musabbeh Al Kaabi, Upstream CEO of ADNOC, told Bloomberg that global oil demand will continue to grow in the coming decades and remain above 100 million bpd in 2040 and beyond, driven by aviation, petrochemicals, and industries including AI and data centers.

Sultan Al Jaber, chief executive of ADNOC, added that “Our response to meet that demand should focus on the data, not the drama.”