Oil Market Report - November 2025

Crude oil prices spent November 2025 in a controlled downdraft, characterized more by a steady grind lower than by any single shock, with both Brent and WTI crude futures tracing parallel paths.

EXECUTIVE SUMMARY

Crude oil prices spent November 2025 in a controlled downdraft, characterized more by a steady grind lower than by any single shock, with both Brent and WTI crude futures tracing parallel paths. This lower repricing took place in response to the accumulation of bearish information: incremental OPEC+ supply against a backdrop of already comfortable inventories, a materially more negative medium-term balance sketched by the IEA, repeated upside surprises in U.S. crude stocks and the prospect of eventual sanctions relief for Russian exports if ceasefire efforts in Ukraine continue to advance. Price action was punctuated by brief attempts to rally—most notably in the first half of the month and again after the sharp mid-month sell-off—but each upswing stalled below prior peaks, and both benchmarks finished the month (as of 27 November) well below their intra-month highs and modestly under their October-end levels. Month-to-date, Brent had eased from $64.77 to $62.38 and WTI from $60.98 to $58.52, implying absolute declines of $2.39 and $2.46 respectively. In percentage terms, this translates into a 3.7% fall for Brent and a 4.0% retreat for WTI over the month, underscoring a moderate but persistent softening in outright prices. On a monthly-average basis, however, the November averages sat only marginally below the October means. The mean November settlement price for Brent stands at approximately $63.54 per barrel, while for WTI the analogous average is about $59.47. When set against the October averages—around $63.83 for Brent and $60.02 for WTI—these figures imply month-on-month declines of roughly $0.30 (-0.5%) and $0.55 (-0.9%) respectively.

From the vantage point of both fundamentals and technical structure, December 2025 likely will start with Brent and WTI crude biased toward a continuation of the gently bearish, supply-heavy regime that dominated November, but without clear evidence of imminent disorderly downside. Technically, both benchmarks have carved out well-defined resistance shelves—Brent repeatedly stalled in the $65–65.5 area, WTI near $61–61.5—while their late-November bases at $60–61 for Brent and $57–58 for WTI form the first meaningful support layers above the psychologically important figures at $60 and $56 respectively; this geometry signals a high probability of December range-trading inside those corridors unless a macro shock emerges. The fundamental backdrop reinforces this structure: the IEA’s projection of a multi-million-barrel surplus for 2026, large U.S. inventory builds in November driven by robust imports, Saudi price discounting into Asia, and the possibility of sanctions easing if Ukraine ceasefire diplomacy advances all weigh against sustained rallies and effectively cap upside attempts near the established resistance zones. At the same time, OPEC+’s signal that no additional output hikes are planned for Q1 2026, alongside still-firm non-OECD Asian demand and some evidence of buyers stepping in on dips during November, tempers the likelihood of an uncontrolled break below support in the absence of new bearish catalysts. As a result, the most probable December configuration is a technically bounded, fundamentally heavy market in which rallies toward $64–65 in Brent or $60–61 in WTI are sold into by macro-driven participants, while dips toward $60 in Brent and $57 in WTI find tentative buying interest; only a decisive breach of those lower support areas—likely requiring another sequence of unexpectedly large U.S. stock builds or a major de-escalation in geopolitical risk premia—would transition the market from a controlled drift lower into a more impulsive downside trend, whereas a durable bullish reversal would require tangible supply restraint beyond current OPEC+ signaling or a material positive surprise in winter demand.

The International Energy Agency reported that the relentless rise in global oil supply briefly reversed course in October 2025, falling by 440 kbd month-over-month to 108.2 mbd, as a raft of planned field maintenance and unscheduled outages curbed output. Nevertheless, total output was a massive 6.2 mbd above January, albeit the low point for the year due to seasonal weather related shut-ins. The IEA now projects world oil supply to rise by 3.1 mbd in 2025 to an annual average of 106.3 mbd and by another 2.5 mbd in 2026 to 108.7 mbd. In a shift from the recent past, this year’s increase is almost evenly divided between non-OPEC+ and OPEC+ producers. Saudi Arabia boosted supply by close to 1.5 mbd from January through October, in line with its higher quota. By contrast, Russian production is up by only 120 kbd over the same period, with growth stymied by sanctions and a challenging operating environment. Russia’s oil industry has come under more severe pressure after the United States and the United Kingdom sanctioned the two largest Russian producers Rosneft and Lukoil, which together produce and internationally market about half of the country’s crude.

The U.S. Energy Information Administration also confirmed that global oil supply in October 2025 entered a brief phase of deceleration after several months of persistent expansion. World liquids production slipped by 0.31 mbd relative to September, posting a modest contraction of 0.3% MoM, bringing to an end a five-month sequence of incremental gains. This downturn marked the sharpest month-over-month retreat in more than a year, albeit remained marginal in absolute terms, particularly when framed against the strong cumulative gains observed throughout 2025. The annual comparison offers a clearer lens on underlying supply conditions. World production exceeded its October 2024 level by 5.37 mbd, an increase of 5.2% YoY, extending a 13-month stretch of uninterrupted year-on-year growth. Moreover, the robust year-on-year profile has helped maintain world supply at levels far above historical seasonal patterns. Output in October stood 8.94 mbd higher than the five-year average for the month, representing a gap of roughly 9.0%. This sizeable surplus relative to medium-term norms suggests that, notwithstanding the monthly pause, global supply remains in a structurally abundant phase.

OPEC total crude output in October 2025 edged higher, according to cartel’s own data, but in a way that clearly signals a maturing upswing rather than a fresh acceleration. Total production increased by just 20 kbd versus September, providing a rise of just +0.1% MoM, which was much less comparing to quotas increase for the month agreed by the OPEC+. Despite the small increment, this brought group output to its highest level in 30 months. The month-on-month expansion has now been sustained for six consecutive months, yet October registered the slowest monthly growth rate in that sequence, indicating a visible loss of momentum at the margin. On a year-earlier comparison, however, the picture remains robust: production was up by 1.93 mbd, or +7.3% YoY, extending an uninterrupted run of positive annual growth to 11 months. Relative to the five-year average for this time of year, OPEC volumes were 1.30 mbd higher, a 4.8% uplift, underscoring that the current level of output stands materially above the medium-term norm even as incremental gains start to flatten, reflecting a strategic shift in cartel’s production strategy this year.

At its meeting held virtually on 2 November 2025, OPEC+ reaffirmed its commitment to the already defined framework of additional voluntary production adjustments—specifically, the incremental restoration of output that was initially cut in April 2023. According to the official communiqué, the eight participating countries (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman) agreed to lift their combined crude-oil production target by another 137 kbd for December 2025. Crucially, beyond December the group elected not to schedule any further monthly increases for January, February and March of 2026 — a clear prudential pause in the pace of output restoration. This decision is as a signal of cautious management of the supply-side even as the producers gradually unwind earlier cuts. On one hand, the group has maintained the incremental addition (137 kbd) that had become the standard monthly restoration step in the recent months. On the other hand, the explicit decision to halt planned output hikes in Q1 2026 reflects concern over the risk of oversupply amid weaker seasonal demand.

Non-OPEC total oil supply in October 2025 showed a mild pause rather than a structural reversal, with aggregate output slipping by 64 kbd month-on-month, or -0.1% MoM. This modest decline interrupted a six-month sequence of consecutive monthly increases, indicating that the strong expansion phase of non-OPEC supply has, at least temporarily, given way to a period of consolidation. However, in year-on-year terms output remained decisively higher, up 2.89 mbd versus October 2024, a robust 4.1% YoY increase. This marked the tenth consecutive month of positive annual growth. Relative to its own recent history, non-OPEC production stayed exceptionally elevated: volumes were 5.92 mbd, or 8.7%, above the five-year seasonal norm for October. Within this aggregate outcome, the regional pattern was highly uneven. The non-OPEC Americas and the Commonwealth of Independent States (CIS) continued to anchor the year-on-year expansion, while non-OPEC Asia-Pacific set fresh record highs. In contrast, Europe and non-OPEC Africa & Middle East saw monthly setbacks despite maintaining modest annual gains.

U.S. oil supply in October 2025 consolidated its position at the center of global liquids growth, with total output reaching yet another record and stretching further above its recent historical range. Total U.S. oil liquids production increased by 279 kbd from September, a 1.2% month-on-month gain. That step-up delivered a new peak for the series of 24.01 mbd and extended a four-month sequence of consecutive monthly increases. On a twelve-month comparison, total supply was 1.12 mbd higher than in October 2024, corresponding to a 4.9% year-on-year increase and marking the thirteenth straight month of annual growth. Relative to its own past, the scale of the expansion is even more striking: October production stood 3.19 mbd, or 15.3%, above the five-year average for this time of year, underscoring that U.S. liquids output has shifted to a structurally higher plateau. This picture is consistent with official projections that place U.S. crude oil production at record levels around 13.5–13.6 mbd in 2025 and see total liquids remaining the dominant source of non-OPEC supply growth.

Shale oil continued to set the tone for overall U.S. crude supply in October. U.S. tight oil output increased by 91 kbd relative to September, a 0.9% month-on-month rise that pushed shale production to a new highest level on records of 10.58 mbd. This was the second consecutive monthly increase and the fastest monthly growth rate in three months. On a year-earlier comparison, shale output was up by 168 kbd, a 1.6% YoY gain. That annual increase marked the fifty-fourth consecutive month of year-on-year growth, underscoring the remarkable durability of the shale expansion; yet it was also the slowest annual growth rate in eight months, hinting at a gradual moderation in the pace of increase. Against its own recent history, shale oil remains very elevated: October production was 1.37 mbd higher than the five-year average, a 14.8% uplift. In terms of composition, shale’s dominance remains clear. Tight oil accounted for 76.69% of total U.S. crude output in October. This share increased by 19.7 basis points month-on-month, reinforcing shale’s centrality in incremental growth, but stood about 74 basis points lower than in October 2024, reflecting the comparatively faster annual growth registered by conventional production over the past year.

The International Energy Agency revised higher worldwide oil demand growth by 170 kbd in 3Q25 to 920 kbd year-on-year, largely due to stronger deliveries in China. This third-quarter increase was more than double 2Q25’s 430 kbd YoY expansion, as the macroeconomic picture broadly improved on easing trade tensions and contributed to minor upward revisions to IEA’s 2025 and 2026 growth forecasts, which are still below 800 kbd for both years. According to the agency, global 2025 gains in oil consumption of 790 kbd in annual terms are led by the United States, China and Nigeria, up by about 120 kbd year-on-year each. Global growth will maintain this rate in 2026, providing another 770 kbd increase to this year’s level. Petrochemical feedstocks remain the bedrock of global gains, but so far this year the sector has significantly underperformed expectations. In 4Q25, global oil consumption growth is expected to ease relative to 3Q25.

The U.S. Energy Information Administration confirmed these concerns of global oil demand cooling in 4Q25 and estimated the figure in October 2025 at 103.75 mbd, which represents a decline of 0.86 mbd versus September, a drop of 0.8% MoM, and brings consumption to the lowest monthly level in five months. By this, the demand has stepped down from the elevated plateau seen in mid-2025, breaking a two-month sequence of incremental month-on-month increases. Despite that setback on a short horizon, the year-on-year comparison remains firmly positive: global demand was 1.32 mbd higher than in October 2024, representing an increase of 1.3% YoY, and this marks the 17^th consecutive month in which global oil consumption has posted an annual gain. When benchmarked against the average for this calendar month over the past five years, October stands 4.96 mbd above that reference, a sizeable 5.0% overshoot. The combination of a monthly contraction with sustained positive annual growth and a large premium to the five-year October mean points to a market that is still structurally tight on the demand side, even as some of the cyclical heat has eased.

According to the International Energy Agency’s most recent data, global observed oil inventories surged by 77.7 mb, or 2.6 mbd, in September 2025 reaching the highest level since July 2021. Oil on water was up by a hefty 80 mb, while OECD commercial stocks rose by a modest 5 mb and non-OECD drew by 7 mb. Over the first nine months of the year, observable inventories have risen by 313 mb, or 1.15 mbd on average. Preliminary October data showed global stocks increased further, led by additional gains in oil on water. Indeed, following an 80 mb increase in oil on water in September, preliminary October data indicate a further 92 mb build, mostly of crude. Sanctioned barrels account for around 32% of the 194 mb rise in crude on water over the past two months. Surging long-haul shipments from producers in the Americas to markets East of Suez and the sharp rise in Middle East loadings also add to the flotilla of stocks. By contrast, stocks on land, with the exception of Chinese crude oil and US gas liquids, remain low across key pricing hubs. Middle distillate markets appear particularly tight with limited potential for relief. Depleted product stocks and a spate of unscheduled refinery outages lifted European and Asian refining margins to two-year highs, while US Mid-continent margins doubled in a matter of days following a refinery outage.

Detailed oil inventories statistics on August 2025 confirmed earlier IEA’s estimates that commercial oil inventories across OECD continued to growth, with the total figure increased by 3.8 mln tons versus July, corresponding to a 0.8% MoM rise. This was not only the second consecutive monthly build but also the quickest month-on-month increase in seven months, indicating a noticeable shift in the direction of inventory adjustment during the summer. The cumulative effect of back-to-back builds pushed total holdings to their highest reading in fourteen months, suggesting that the inventory cycle has moved out of its trough phase. On a year-on-year basis, the inventories also turned a corner. Total oil stocks in August stood 1.2 mln tons above their level in the corresponding month of the previous year, a 0.3% YoY gain. This positive dynamic broke a four-month run of year-on-year declines and marked the strongest annual rate of growth in five months. The data thus indicate that the OECD market has not only stopped losing inventories relative to the recent past but has begun to rebuild them, albeit slowly.  Despite this apparent improvement, total inventories are still meaningfully below longer-term benchmarks. Relative to the five-year average for August, OECD oil stocks remained 29.1 mln tons lower, equivalent to a 5.8% shortfall. This gap underscores that the recent builds have only partially repaired the drawdown accumulated in the earlier part of the cycle.

U.S. total oil inventories declined in October 2025 by 19.09 mb, a 1.1% contraction versus September. This monthly draw reversed a three-month sequence of incremental builds and marked the sharpest decline over the last 12 months. Despite that near-term tightening, the absolute stock position remained higher than a year earlier: total holdings exceeded October 2024 levels by 34.01 mb, a 2.1% YoY increase and the fourth consecutive year-on-year rise, with the annual growth rate the quickest in eight months. The more structural lens, however, comes from the deviation versus the five-year seasonal norm. On that basis total oil inventories in the United States were still 77.59 mb, or 4.4%, below the average for this time of year, signaling that the system, while better supplied than in 2024, has not fully rebuilt the buffer eroded during the heavy drawdown period of 2022–2023.

The October reading for Cushing crude inventories showed another modest decline on a month-earlier basis, roughly 0.60 mb lower, a contraction of about 2.6% MoM. This marked the second consecutive monthly draw and pushed stocks to the lowest level in three months. The year-on-year comparison sharpens that picture. Relative to October 2024, volumes at the hub were down about 2.49 mb, a fall of nearly 9.8% YoY. This was not a one-off: it extended a full year of uninterrupted YoY declines, underlining that Cushing’s tightness is structural rather than purely cyclical. The deviation from seasonal norms is even more striking. Versus the average level for October over the past five years, Cushing held roughly 9.6 mb fewer barrels, a shortfall on the order of 29.6%. In other words, nearly one-third of the “typical” October cushion at the hub has disappeared. That gap cannot be explained purely by noise in weekly flows; it points to a re-anchoring of where crude is being stored and balanced within the U.S. system. It is also consistent with the pattern seen earlier in 2025, when Cushing stocks fell to their lowest levels in roughly a decade during the winter, even as nationwide crude inventories remained far from crisis levels.

Global offshore oil stocks in October 2025 were in a mild retreat month-on-month but still markedly higher than a year earlier, and slightly lean versus history. Compared with September, worldwide offshore stocks fell by 5.33 mb, recording a 5.7% MoM decline. Despite that reduction, volumes remained 29.27 mb above October 2024, a 49.9% YoY increase. This was the fourth consecutive month of positive annual growth and the strongest year-on-year expansion in more than two years, signaling a clear rebuilding phase from last year’s low base. Even so, total offshore holdings were still 5.23 mb (about 5.6%) below their five-year average for October, so globally the system had not yet shifted into an historically large surplus at sea. The modest net draw on the month is more than fully explained by a large reduction in Middle East Gulf holdings; and the distribution of barrels is tilting decisively toward Asia and, to a lesser extent, West Africa and European coastal waters. This re-allocation dovetails with broader changes documented in tanker and oil-market reports. Oil in transit reached one of its highest levels since the 2020 floating-storage episode, driven largely by sanctioned or discounted barrels that cannot be discharged promptly in their intended markets.

AC - Oil Market Report - Nov-2025.pdf

Download PDF • 1.64MB