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SLOW BURN FOR BRENT TOWARDS SUB 60 LEVELS

ADMIN || 13th October 2025

OPEC+'s output hike of 137,000 barrels a day (bpd) in November announced Oct. 5 as part of a broader unwinding of 2023's voluntary cuts heralds a continued rise in global supply. A series of production increases since April have helped the cartel to add about 2.47 million barrels a day of oil by November, and reassert market control while keeping West Texas Intermediate (WTI) crude's average price at $64.34 from April through September.

This small, yet gradual increase could leave markets oblivious to a coming supply glut, while global demand risks faltering on US tariffs and China's deflation. WTI could retreat to $55-$60 in 4Q, as all 1.65 million bpd of earlier, voluntary cuts will be fully unwound prior to September 2026.

Oil inventories to rise sooner than later

The OPEC+ decision to raise November's supply a small yet unexpected 137,000 barrel-a-day boost following a chain of monthly increases from April through October could leave markets in a surplus of up to 860,000 bpd in 4Q, adding to global inventory. The continued output increases in 4Q would lift US comparative inventory (crude, gasoline and diesel) by 44 million barrels (5.8%) to 804 million from 760 million during the week of Oct. 8. That could be enough to send WTI's fair value as low as $55 a barrel in 1Q26.

OPEC wants market share more than price stability

OPEC's share of the oil market could keep rising after hitting 27.76% in September, up from 25.99% in January, reflecting its shift from scarcity-driven production to reclaiming market share.

This change follows 2019's ramp-up in US shale production, and marks a reversal from earlier periods when renegade OPEC member countries thumbed their noses at output limits. OPEC+ which includes non-OPEC nations such as Russia and Kazakhstan has been stepping up output since April, and markets expect that to continue as the group pursues its 30% market share target, which it last held in 2020 and 2022. The cartel could keep pumping unless the higher output negatively impacts supply, demand and pricing.

Summary: Brent slow grind towards sub 60 levels is inevitable. Lower for longer.

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