Market Shock: WTI Plunges to Multi-Month Low as Supply Surge Overwhelms Weak Demand

​Global oil markets faced a sharp downturn on Thursday, as the price of West Texas Intermediate (WTI) crude oil plummeted below the $61 per barrel mark, registering its lowest level in several months. This severe drop comes amid escalating concerns that a global supply flood is coinciding with a deterioration in demand across key markets, signaling that the energy sector has entered a new phase of sustained pressure.

​The significant slide is attributed to a confluence of factors that have jointly weighed on prices during a sensitive period. Recent reports indicate a rise in supplies from several major producing regions, primarily the United States and Iraq, generating anxiety among investors.

Notably, the resumption of oil exports from Iraq’s Kurdistan region to the Turkish port of Ceyhan has added an estimated 200,000 barrels per day to the global crude supply. This influx occurs precisely when global demand, particularly in Asia, is experiencing a noticeable slowdown.
​The pressure isn’t confined to Middle Eastern developments. The surge in U.S. shale oil production has further heightened concerns about the fundamental balance between supply and consumption.

This output increase is compounded by indicators of weakened demand from major Asian economies like China and Japan, reinforcing fears that current supplies are significantly outstripping the market’s capacity to absorb them. This dynamic has driven WTI prices down to levels not seen since June.

​Given these market realities, investors find themselves facing continuous challenges and are closely monitoring any potential actions by the “OPEC+” alliance. Should prices continue their downward trajectory, the coalition may be compelled to re-evaluate its production policies to safeguard market stability.

Furthermore, the fate of oil prices remains inextricably linked to developments in the global economy and future consumption forecasts. The current performance of WTI crude clearly demonstrates that the market is grappling with intensifying headwinds, where the combined forces of excess supply and soft global demand are keeping prices under significant duress and raising serious questions about the future stability of the oil market in the near term.