Crude oil futures are trending downwards, driven by concerns of a significant oversupply in the market and weakened demand forecasts. A sharp selloff across financial markets also contributed to the downward pressure on prices. Diplomatic efforts regarding Iran are reducing the immediate risk of supply disruptions.
- WTI crude oil futures fell to around $62.5 per barrel on Friday.
- The market is likely to face a surplus of just over 3.7 million barrels per day in 2026, a record annual average glut.
- Global oil demand forecast for 2026 has been lowered.
- Global inventories expanded in 2025 at the fastest pace since the 2020 pandemic.
- Talks with Iran could stretch on for as long as a month, reducing the near-term likelihood of military action.
- A sharp selloff across financial markets also weighed on prices.
The prevailing sentiment points towards a bearish outlook for oil. The anticipated surplus and reduced demand suggest prices may struggle to maintain current levels. While the absence of immediate military conflict mitigates the risk of supply shock, the ongoing diplomatic efforts and broader market uncertainty create a landscape of continued downward pressure.