WTI recovers slightly amid oversupply fears and EIA inventory surge

• The Oil market remains under pressure, weighed down by expectations of an oversupplied global market and a strong weekly increase in US inventories.
• The EIA report shows a much larger-than-expected rise in crude stockpiles, intensifying concerns about weakening demand.
• Improved sentiment after the US government reopened is nevertheless helping the WTI recover slightly.

West Texas Intermediate (WTI) US Oil trades around $58.80 on Thursday at the time of writing, up 0.70% on the day. Crude Oil is attempting to stabilize after two highly volatile days, including a drop of more than 4% on Wednesday, driven by persistent fears of a global supply glut.

The market remains vulnerable to several fundamental factors. The Energy Information Administration (EIA), which recently revised upward its outlook for US Oil production in 2025, released on Thursday weekly stockpile data that largely exceeded expectations. Crude inventories rose by 6.413 million barrels, well above the 2 million expected and already higher than last week's 5.202 million increase. This rapid accumulation strengthens the view of an oversupplied market amid still-fragile demand conditions.

At the same time, the International Energy Agency (IEA) has softened its outlook on peak Oil demand, now expecting global consumption to continue rising through 2050. This revision adds to the message from the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which forecasts a supply surplus from 2026 onward, after noting that output already exceeded demand in the third quarter. According to Reuters, an analyst at DBS Bank stressed that OPEC+'s shift in its 2026 balance outlook has triggered bearish sentiment by increasing concerns over a lasting supply imbalance.

One factor is, however, helping ease some of the pressure on prices: the reopening of the US federal government. President Donald Trump signed the funding bill ending the longest shutdown in US history. The return of federal agencies to normal operations supports risk appetite and raises hopes that the resumption of economic data releases will quickly clarify the economic outlook. Improved sentiment allows Oil prices to recover following Wednesday's sharp correction.

Traders will continue monitoring upcoming monthly reports from the IEA and OPEC+, as well as new US economic data, to assess whether the current rebound in WTI can extend or whether bearish fundamentals will ultimately prevail.