U.S. Crude Oil Inventory Dynamics and the Bearish Outlook for Global Oil Markets

The global oil market in late 2025 is grappling with a confluence of bearish pressures, driven by surging U.S. crude production, a widening global supply glut, and weak demand growth. These dynamics are reshaping investment strategies, particularly as refined product markets exhibit relative resilience amid the broader downturn.

U.S. Crude Inventory Trends: A Harbinger of Oversupply

The U.S. (EIA) in crude oil inventories for the week ending November 28, 2025, defying expectations of a draw. , signaling persistent oversupply pressures. While Cushing, Oklahoma, storage-a key benchmark for U.S. crude prices-saw a four-week decline, the broader trend of inventory accumulation underscores the market's imbalance. The EIA forecasts U.S. , a revised upward projection that highlights the nation's role in exacerbating global supply-side challenges.

Global Oversupply and the Bearish Outlook

The International Energy Agency (IEA) projects a record global oil surplus of 4.0 million barrels per day in 2026, driven by non-OPEC+ production growth and sluggish demand. Non-OPEC+ countries, including the U.S., Brazil, and Canada, are operating near record output levels, while China's economic slowdown and the global shift to electric vehicles have permanently displaced gasoline consumption by over 500,000 barrels per day. The IEA's November 2025 report further notes that global oil supply is expected to rise , with non-OPEC+ and OPEC+ producers each contributing roughly half of this increase.

OPEC+ has attempted to stabilize the market by pausing production increases in Q1 2026, but the unwinding of prior voluntary cuts and rising output from members like the UAE, Iraq, and Kazakhstan threaten to widen the supply-demand gap. The EIA anticipates that global oil inventories will continue to rise through 2026, with in Q4 2025. These trends are expected to drive Brent crude prices lower, with .

Refined Products: A Bright Spot in a Downturn

While crude prices face downward pressure, refined product markets have shown resilience. Gasoline and gasoil prices have been supported by supply disruptions, including on Russian refineries and U.S. sanctions on major Russian oil companies. These factors have temporarily offset oversupply concerns, with ICE Brent crude settling above $65 per barrel in late 2025. However, analysts caution that this strength is unlikely to persist, as global refining margins remain vulnerable to inventory builds and weak demand.