Oil Heads for Second Weekly Decline as Glut Concerns Dominate
Oil headed for a second weekly decline as concerns over a growing glut outweighed geopolitical risks to supply.
West Texas Intermediate held above $56 a barrel on Friday but was still down about 2% for the week, while Brent traded over $60 a barrel. Ukraine hit an oil tanker connected to Russia’s shadow fleet in the Mediterranean Sea, a fresh escalation in a string of attacks on vessels aiding Moscow’s oil exports.
Despite those risks, virtually all of the world’s biggest traders see the market in a state of oversupply early next year, with industry heavyweight Trafigura Group expecting Brent in the $50s through the middle of 2026, before recovering later in the year.
Oil has lost about a fifth this year as OPEC+ returned barrels faster than anticipated and producers elsewhere also pumped more, while demand was lackluster. Geopolitical risks, especially around Russian and Venezuelan supply, have helped temper some of the declines.
“The dominant sentiment right now is definitely a structural surplus,” said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. “That glut mindset is outweighing geopolitical flare-ups from Russia to Venezuela.”
Oil trading activity is thin heading into the Christmas and New Year holidays, which could lead to choppy price moves. The aggregated volume of Brent’s traded contracts was below average for the time of day on Friday.
WTI for February rose 0.8% to $56.58 a barrel at 9:55 a.m. in New York. January futures expire Friday.
Brent for February was up 0.6% to $60.19 a barrel.
Source : Bloomberg.com
