Crude oil extended its losses after Saudi Arabia reduced its official selling prices, signaling uncertainty in supply outlook, while a broader stock market decline also pressured oil prices.

WTI settled near $59 per barrel, down approximately 0.3% intraday, following two consecutive sessions of declines. Increased volatility on Wall Street further weighed on oil prices.

Saudi Arabia lowered December prices for its key crude grade to Asia to an 11-month low. Although the price adjustment aligned with market expectations, traders interpreted it as a bearish signal, reflecting the producer alliance's weakening confidence in the market's ability to absorb additional supply. Analysts widely anticipate a supply surplus emerging from next year.

Key price indicators suggest deteriorating supply expectations, with the WTI front-month futures premium narrowing over recent weeks, approaching February lows. A similar trend was observed in Brent crude.

Despite this, U.S. shale producers continue advancing output plans. Diamondback Energy Inc., Coterra Energy Inc., and Ovintiv Inc. announced marginal production increases this year or by 2026, even as oil prices hover near breakeven levels for many shale wells.

However, bearish supply sentiment hasn't spread to refined products. Traders are assessing potential supply disruptions from U.S. restrictions on Russian crude purchases and Ukrainian attacks on Russian energy infrastructure. These factors, coupled with declining global refining capacity, pushed diesel and gasoline futures to their highest levels since July, supporting the broader energy complex.

WTI December crude futures fell 0.29% to settle at $59.43/barrel. Brent January futures declined 0.22% to settle at $63.38/barrel.