• WTI crude suffered its worst daily drop in months, settling at $82.61/bbl, a 7.5% decline.
  • The sell-off was driven by a stronger dollar and renewed demand concerns amid weak economic data.
  • Analysts warn further downside is possible if inventories continue to build.

A Sharp Reversal

U.S. crude oil futures plunged on Thursday, with West Texas Intermediate for December delivery settling at $82.61 per barrel, down $6.70, or 7.5%. The session marked the largest single-day percentage loss since July, as traders rushed to price in a deteriorating demand outlook.

The move came after a stronger dollar index, which rose 0.8%, making dollar-denominated commodities more expensive for foreign buyers. At the same time, weekly data from the Energy Information Administration showed a larger-than-expected build in crude inventories, adding 5.9 million barrels last week, according to people familiar with the matter. Refinery utilization also dipped, signaling weaker near-term demand.

Demand Fears Resurface

“The market is waking up to the fact that global demand may be softening faster than anticipated,” said one trader at a major Houston-based hedge fund. “We’re seeing margin calls and forced selling across the complex.”

The drop was broad-based, with Brent crude also falling 6.8% to $84.63/bbl. The sell-off accelerated after the dollar strengthened on hawkish comments from a Federal Reserve official, who hinted that rates may stay higher for longer.

Adding to the bearish sentiment, OPEC+ delegates indicated no immediate plans to adjust production targets despite the price slide, according to sources familiar with the matter. The group is next scheduled to meet in late November.

What’s Next?

Market participants are now watching for further inventory data and any geopolitical surprises. A break below $80/bbl could trigger stop-loss selling and accelerate the decline. Conversely, any supply disruption or a dovish Fed pivot could spark a sharp rebound.

Correction: An earlier version of this article misstated the settlement price of Brent crude. It has been updated.