A. M. 
Oil prices have plummeted to their lowest levels in five months, with West Texas Intermediate crude falling to US$57.46 per barrel and Brent crude falling to approximately US$61 per barrel on thursday. This could signal a possible drop in gasoline and diesel prices for the next two weeks in El Salvador, an importing country.
The sharp drop is driven by a perfect storm of concerns about oversupply, record U.S. production, and an unexpectedly large increase in crude oil inventories that has alarmed markets already grappling with weak global demand.
The Energy Information Administration reported that U.S. crude oil inventories increased by 3.5 million barrels last week, far exceeding analysts’ expectations of just 288,000 barrels. This marked the second consecutive week of significant inventory increases, raising renewed concerns about weakening demand in the world’s largest oil-consuming nation.
Record production fuels supply overhang fears
U.S. crude oil production reached an all-time high of 13.636 million barrels per day during the week ending october 10, surpassing the previous record of 13.631 million barrels per day set in december 2024. The achievement comes despite growing market concerns about an impending supply overhang that could further depress prices.
The International Energy Agency presented a particularly bearish outlook this week, forecasting that global oil supply will exceed demand by nearly 4 million barrels per day in 2026—the largest annual surplus on record. This represents an upward revision from last month’s projection of 3.3 million barrels per day and would represent nearly 4% of global demand.
“The anticipated surplus would be almost double the surplus we actually ended up with in 2020 during the peak of global lockdowns”, noted Rory Johnston, founder of Commodity Context. The IEA attributes the projected oversupply to OPEC+’s gradual reversal of voluntary production cuts and increased output from non-OPEC+ producers, including the United States, Brazil, Canada, and Guyana.
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