Oil Steady, But Threat of Oversupply Looms
Oil prices held steady after previously posting their biggest drop in nearly three weeks, as market participants awaited a series of key reports this week to gauge the extent of the global oversupply. Brent crude traded just above $62 per barrel after falling about 2% on Monday, while West Texas Intermediate (WTI) hovered near $59 per barrel. The market now awaits the release of the US Energy Information Administration's (EIA) Short-Term Energy Outlook on Tuesday, followed by reports from the International Energy Agency (IEA) and OPEC later this week.
So far, the IEA has forecast a record surplus next year, and traders will be closely watching for any changes in that outlook. Since early November, crude prices have tended to be stuck in a narrow range around $4 per barrel, as investors weighed multiple factors: from the potential oversupply, the impact of sanctions on Russia, to possible export restrictions from other major producers. This situation has left the oil market in a "wait-and-see" mode, with no clear direction.
According to Warren Patterson, head of commodity strategy at ING Groep NV, the oil market surplus is expected to grow by 2026, with supply exceeding demand by more than 2 million barrels per day. He projects Brent prices will average around $57 per barrel throughout the year, assuming Russian oil flows continue despite US sanctions. If this scenario occurs, market participants should prepare for a period of lower oil prices and additional pressure on producers, while for consumers and importing countries, this situation could create a profitable "energy discount." (az)
Source: Newsmaker.id
