Crude oil prices began the day with a loss in Asian trading today as concerns about oversupply and weak demand continued to weigh on prices.

Traders are also waiting for the outcome of a Fed meeting today and the Energy Information Administration’s latest weekly oil inventory report. Reuters noted in a report that recent economic data had reinforced expectations that the Fed was not going to start cutting rates in early 2024, which was translated as a bearish factor for oil since higher interest rates discourage increased consumption.

Meanwhile, in more bearish news, Russian oil exports hit the highest since July, according to ANZ analysts cited by Reuters, which deepened doubts about how much of the recently agreed additional OPEC+ output cuts would actually be implemented come January.

News that U.S. oil production is rising did not help matters, either, adding fuel to oversupply concerns that have flipped the futures market into a contango until the middle of 2024, according to Bloomberg.

“A US-led bump in non-OPEC supply and doubts over OPEC compliance colliding with some prospects of demand softening,” is how Mizuho Bank’s Asia head of economics and strategy, Vishnu Varathan described the situation to Bloomberg.

Oil prices have shed about 25% since September despite OPEC+ efforts to put a floor under benchmarks. WTI is currently trading below $70 per barrel while Brent crude has slipped below $75 per barrel.

Normally, falling crude oil prices would encourage more consumption but right now it seems there is serious doubt this will be happening anytime soon. At the same time, supply perceptions have swung from deficit to oversupply in a matter of months, mostly on the back of production updates outside OPEC and especially in the U.S., where the EIA said oil supply was seen growing by 300,000 bpd in 2024.