Oil Under Pressure from Surplus
Oil prices are headed for a second weekly decline as market concerns about oversupply outweigh potential supply disruptions. Brent fell below $60/barrel and fell more than 2% throughout the week, while WTI traded around $56/barrel.
Nearly all major global traders expect the market to be oversupplied by early next year. Trafigura even predicts the benchmark Brent price will remain in the $50s until mid-2026, confirming the view that supply pressure will remain dominant.
So far this year, oil has fallen around 20% as OPEC+ restored production faster than expected and other producers increased supply, while demand was deemed insufficient. Although geopolitical risks—particularly related to Russian and Venezuelan supply—have partially offset the decline, the underlying sentiment remains a surplus. "The dominant sentiment now is clearly a structural surplus," said Haris Khurshid of Karobaar Capital, emphasizing that glut concerns override geopolitical concerns.
With the Christmas and New Year holidays approaching, trading activity is also thin, potentially making price movements more volatile. Britain imposed sanctions on three smaller Russian oil producers on Thursday, while US-mediated peace efforts between Moscow and Kyiv remain unclear. In midday trading in Singapore, February Brent crude fell 0.2% to $59.72, January WTI crude fell 0.2% to $56.02 (contract expires Friday), and the more active February WTI crude fell 0.2% to $55.89. (asd)
Source: Newsmaker.id
