By Giulia Petroni
Here's a look at what happened in oil markets in the week of Nov. 3-7 and what the focus will be in the days to come.
OVERVIEW: Persistent concerns over excess supply and weaker demand are outweighing risks of disruptions due to U.S. sanctions, with Brent crude now trading around $63 a barrel and West Texas Intermediate just below $60 a barrel. The benchmarks are on track for weekly losses of 1.8% and 2.1%, respectively.
MACRO: Traders have increased their bets on a December Fed interest-rate cut after U.S. data on Thursday showed a surge in October layoffs, with the FedWatch tool now indicating they are pricing in a 70.4% chance. Meanwhile, U.S. consumers' confidence slid further in November amid persistent price increases and an extended government shutdown.
GEOPOLITICAL RISKS: Commodity trader Gunvor has withdrawn its offer to buy the international assets of sanctioned Russian oil producer Lukoil after the U.S. Treasury Department said it wouldn't get a license--a move that signals the Trump administration is taking a hard-line approach in its effort to pressure Moscow.
The imposition of U.S. sanctions on Russia's top oil producers has added a fresh layer of uncertainty to the oil market, as the restriction of flows could significantly change the price outlook.
However, "the price action that we have seen following the sanction announcement suggests that the market is of the view that we will not see a significant amount of supply lost," ING analysts said this week. "Since 2022, Russia has effectively demonstrated its ability to circumvent sanctions and embargoes."
SUPPLY AND DEMAND: While OPEC+ agreed to another modest production increase of 137,000 barrels a day for December, some analysts say the group's decision to pause hikes in the first quarter of 2026 suggests the prospect of a sizeable surplus next year is causing some concern. Meanwhile, in a further sign of caution, Saudi Arabia sharply reduced the price of the crude it sells to Asian customers for December.
Adding to the bearish sentiment, the latest data from the Energy Information Administration showed U.S. crude stockpiles rose by 5.2 million barrels last week, against expectations of a 100,000-barrel decline.
Traders are also keeping a close eye on China's continued build-up of oil stocks. "The question is how long the stockpiling in China will continue and when the oil will start flowing into the tanks of industrialized countries in greater quantities," Commerzbank analysts said.
WHAT'S AHEAD: Next week, the EIA, OPEC, and the International Energy Agency will release their monthly oil reports, with traders expected to focus on supply estimates. "Two of the three major energy agencies are likely to confirm the oversupply in the oil market," analysts at Commerzbank said. "However, we do not expect stronger price pressure until oil stocks in industrialized countries rise more sharply as a result."
The IEA will also publish its 2025 World Energy Outlook.
Meanwhile, the record-long government shutdown has resulted in a data blackout, pushing back economic data reports closely watched by the market and the Federal Reserve.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
November 07, 2025 12:01 ET (17:01 GMT)
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