Crude Prices Dip to Two-Month Low Amid Supply Glut Despite Geopolitical Risks

Global crude prices retreated to a two-month low, with Brent crude settling at $78.40 per barrel on December 14, 2025, marking the weakest level since early October. The decline came despite persistent geopolitical risks, including heightened tensions in the Red Sea and ongoing regional instability affecting shipping routes. Market participants cited a significant build-up in global crude inventories and stronger-than-expected output from OPEC+ members as primary drivers of the sell-off. Data from international energy agencies indicated that global crude stockpiles rose by 1.4 million barrels per day in November, with OECD commercial inventories exceeding the five-year average by 15 million barrels. This oversupply dynamic has pressured prices, even as geopolitical disruptions in the Middle East have continued to disrupt maritime traffic and elevate insurance costs for tankers. Despite these risks, the market's focus has shifted toward fundamentals, with demand forecasts from major economies revised downward. The U.S. Energy Information Administration reported that domestic crude production reached 13.1 million barrels per day in December, a 2.8% increase from the previous quarter. Meanwhile, China’s refined product demand slowed in November, with gasoline consumption dropping 4.2% year-on-year, further weakening market sentiment. These figures suggest a structural imbalance between supply and demand, particularly in key Asian and North American markets. The price decline has impacted energy equities, with oil majors including ExxonMobil (XOM) and Chevron (CVX) seeing shares fall 2.1% and 1.7% respectively on the day. Refiners and commodity traders are reassessing inventory levels and hedging strategies amid uncertainty over the sustainability of current price levels.