Over the past few trading sessions, oil price movements have defied most predictions, leaving market participants struggling to navigate extreme volatility. Both bulls and bears have experienced dramatic swings in sentiment.

Initially, crude oil prices appeared stagnant, repeating nearly identical daily patterns for three consecutive sessions. However, the market abruptly shifted gears this week. On Tuesday, prices posted their largest single-day gain in three weeks, only to plunge 4% on Wednesday following OPEC's warning about oversupply. The rollercoaster continued with sharp rebounds on Thursday and Friday driven by geopolitical tensions. Despite remaining within a defined trading range, these violent swings have challenged investors. ICE data shows Brent crude speculators increased net long positions by 12,636 contracts to 164,867 in the week ending November 11.

Geopolitical risks temporarily offset supply glut pressures, helping oil prices eke out a marginal weekly gain. European benchmark Brent outperformed other crudes but still posted less than 1% weekly growth, reflecting the market's stalemate amid competing forces. Notably, Brent time spreads strengthened again this week, signaling supply concerns for Western energy producers. European diesel prices have hit their highest levels since June, with refining margins continuing to outpace crude.

**Supply Disruptions Emerge Amid Global Oversupply** OPEC and IEA released conflicting monthly reports this week. OPEC confirmed for the first time that global oil markets have flipped into surplus, revising its Q3 assessment from a 400,000 bpd deficit to a 500,000 bpd surplus. The cartel also cut its 2026 demand forecast for OPEC+ crude by 100,000 bpd to 43 million bpd. Meanwhile, the IEA warned of worsening oversupply, projecting 2026's surplus at 4.09 million bpd (up from 3.97 million).

However, the IEA noted significant uncertainty regarding Russian output, citing "considerable downside risks" from sanctions. The impact is already visible as Urals crude's discount to Brent widened to $20/barrel - this year's widest gap. Tanker tracking shows Russian export volumes remain stable but shipping delays have surged, with sanctioned vessels experiencing record floating storage levels since mid-2022.

Ukraine's intensified drone strikes on Russian energy infrastructure, including Friday's attack that temporarily halted operations at Novorossiysk (handling 2% of global supply), added geopolitical premium. Meanwhile, Venezuela faces heightened US military threats, with the White House holding multiple meetings about potential intervention.

**Inventory Glut Deepens** Kpler data reveals global crude inventories have grown by 50 million barrels over three weeks, while floating storage has ballooned by 170 million barrels since September. Bloomberg reports VLCC rates hit five-year highs as the oil tanker shortage worsens, with Middle East-to-China shipping costs surging to $126,000/day.

**Outlook** While structural oversupply maintains downward pressure on oil prices, sanctions, infrastructure attacks and geopolitical risks continue injecting volatility. This tug-of-war suggests crude will remain range-bound with elevated price swings in coming weeks, requiring careful timing for market participants.