The US crude stocks, a key statistic that determines the price of crude oil in the world, have been steadily rising since June, despite the nation being in the peak summer driving season, from April to September.
Most analysts believe it is due to the increased oil production in the US: the forecasts for 2025-26 suggest that the US can produce 13.4 million barrels per day, especially in the Permian basin that is estimated to be accounting for almost 50% of US production; it goes without saying that an output of this magnitude leads to a surplus of supply that in turn can lead to a rise in oil stocks.
Some analysts, however, sound somewhat pessimistic: they think the rising inventories is a sign of weak demand due to high prices and economic worries, which partly stem from tariff wars; there has been a drop in gasoline demand recently, according to the latest data.
In addition, the US refineries are said be operating at 94% capacity, producing more oil than what markets can really absorb; the overproduction could also be a cause of increased inventories.
Despite the threats from the US, Russian oil supply, meanwhile, has been steadily adding over 7.3 million barrels per day to the global supply; Iranian oil supply has not trickled down either despite the tightening sanctions. Not only do they increase the global oil supply, but also weigh down on the price of crude oil.
Finally, the trade disputes between the world's top economy and the rest of the world are far from over despite the 'agreements'. In this context, the cautious approach of both investors and traders as well as the spending patterns of consumers are perfectly understandable. The US crude stocks sum up it all.
