Oil Price Forecast - Oil Fall Sharply: WTI Sinks to $59 as Ceasefire and OPEC+ Outlook Drive Multi-Month Lows

WTI and Brent Crude (CL=F, BZ=F) Extend Weekly Losses as Gaza Ceasefire and OPEC+ Outlook Drag Prices Below $60

WTI Crude Slides to Five-Month Low at $59.29 as Risk Premium Evaporates

West Texas Intermediate (CL=F) extended its decline into Friday’s session, dropping to $59.29 per barrel, marking a 3.61% daily loss and its lowest level since May. The fall reflects the rapid unwinding of the geopolitical risk premium following the Israel–Hamas ceasefire deal. Traders shifted focus from security risks in the Red Sea to oversupply concerns as OPEC+ begins the gradual unwinding of its production cuts. Earlier in the day, WTI briefly touched $59.57, signaling renewed bearish momentum with strong sell-side flows across U.S. energy futures.
The U.S. Energy Information Administration (EIA) confirmed inventories had risen by nearly 4 million barrels week-over-week, amplifying pressure on short-term demand expectations already strained by fears of a prolonged U.S. government shutdown that could weigh on industrial fuel consumption.

Brent (BZ=F) Drops to $63.09: Multi-Month Lows Highlight Supply Overhang

Brent crude mirrored WTI’s weakness, sliding 3.27% to $63.09, after briefly hitting $63.27 — its lowest since early June. Analysts cited an accelerating shift from geopolitical to structural concerns. The Gaza ceasefire, backed by Washington and ratified by Israel, eased fears of shipping disruptions through the Suez Canal and Red Sea, previously priced into risk premiums.
OPEC+’s decision to increase production more modestly than expected in November momentarily slowed the selloff, yet the underlying problem remains: global crude stocks are building faster than demand. BMI noted that “expectations for a sharp ramp-up in supply have not yet driven prices much lower,” but traders anticipate the next wave of OPEC+ output could test Brent support near $60 if consumption fails to rebound.

EIA, JPMorgan, and Standard Chartered Diverge on 2025 Outlook

Forecast dispersion widened sharply this week.
The EIA’s October Short-Term Energy Outlook revised its average 2025 WTI forecast to $65.00 per barrel, up from $64.16 in September, while projecting a 2026 average of $48.50. The agency expects Q4 2025 to average $58.05, followed by a 2026 Q1 dip to $47.97.
By contrast, J.P. Morgan remains more conservative, forecasting $62/bbl for 2025 and $53/bbl for 2026, citing weak global GDP and softening Chinese refinery runs. Standard Chartered, on the other hand, remains bullish long-term, projecting a 2026 rebound to $75, with WTI climbing to $80 by late 2026.
Morningstar aligned closer to the EIA, keeping its 2025 base-case at $65, emphasizing that year-to-date price action justified the upgrade from $60. The firm’s “stress case” models a decline to $45 next year, should global demand contract under monetary tightening and a slowdown in Asia’s petrochemical sector.

OPEC+ Strategy and Oversupply Concerns Return to Center Stage

OPEC+’s gradual easing of its 1.3 million barrels-per-day (bpd) output cut agreement continues to weigh heavily on sentiment. The bloc’s smaller-than-expected November production hike momentarily stabilized futures mid-week, but the EIA’s supply data revived fears that the market could enter a surplus exceeding 1.5 million bpd by early 2026.
Saudi Arabia’s fiscal breakeven remains near $78/bbl, meaning Riyadh faces growing budget pressure if prices stay under $65 for extended periods. Russia’s production, meanwhile, remains resilient despite sanctions, with volumes near 9.3 million bpd, complicating OPEC+’s supply balancing act.
Energy traders now anticipate that Saudi Arabia and the UAE may delay deeper output restoration until early 2026, particularly if Brent slips below $60 — a critical psychological and technical threshold.

Macroeconomic Risks Amplify Downward Momentum

Beyond OPEC+, two macro forces are shaping oil’s near-term trajectory: U.S. fiscal uncertainty and China’s muted recovery. A possible U.S. government shutdown, as warned by House leaders, could trim oil demand by up to 300,000 bpd during Q4, according to ANZ Research estimates. Meanwhile, Chinese refinery throughput declined for a third consecutive month in September, with daily runs averaging 13.8 million bpd, down 4% year-on-year.
European energy demand also remains capped by mild weather and high LNG storage levels, reducing the need for crude-linked power generation. Traders noted that Dutch TTF gas futures, while firming slightly this week, still trade at the equivalent of $3.16/MMBtu, signaling muted substitution demand for oil-based fuels.

Technicals: WTI Faces Critical $60 Support, Brent Eyeing $64 Breakdown

Technical charts show WTI forming a large “H” pattern, implying extended downside momentum should prices breach $60, with next support near $56.00. Momentum oscillators confirm bearish bias, while moving averages have begun to diverge downward.
For Brent, resistance sits near $64.80, the prior session’s high, with sellers dominating intraday bounces. A sustained breakdown below $63.00 could open a path to $60.50, where mid-year lows coincide with prior volume clusters. Despite oversold short-term indicators, no fundamental catalyst supports a sustainable rebound before inventories stabilize.

Energy Transition Headlines Contrast the Market’s Weakness

Even as oil futures tumble, European refiners are pushing toward decarbonization. Repsol’s Tarragona facility achieved industrial-scale production of Nexa 95 renewable gasoline, cutting net CO₂ emissions by over 70% versus conventional fuels. The product, available at 20 Spanish stations and expanding to 30 by year-end, underscores Europe’s accelerating shift toward low-carbon transport. However, for crude markets, such innovations reinforce the long-term demand headwinds that could cap any future rallies.

Market Sentiment: Bearish Bias Prevails Amid Lack of Catalysts

Positioning data indicates a sharp rise in speculative short interest across both WTI and Brent futures, with open interest expanding 7% week-on-week. Hedge funds have trimmed long exposure to pre-April levels, signaling a shift from geopolitical to macro-driven sentiment.
The Gaza ceasefire, while reducing supply disruption risk, removed a key bullish narrative that sustained crude above $70 earlier this quarter. Combined with stronger U.S. dollar dynamics and falling global refinery margins, sentiment now leans decisively bearish unless OPEC+ intervenes or inventories reverse trend.

Verdict: Oil Prices Bearish in Near Term – Hold Bias at $59–$63 Range

Based on aggregated data from EIA, OPEC+, and major banks, the outlook remains bearish short-term with a hold bias between $59 and $63 until supply normalization. Downside pressure dominates as risk premiums fade, but deep oversold conditions may trigger short-covering rebounds toward $64–$66.
The structural picture remains mixed: 2025 averages between $62–$65 are plausible, yet 2026 could retreat toward $50 under global economic slowdown. Long-term investors should monitor OPEC+ policy adjustments and fiscal tolerance from Riyadh, while short-term traders may find tactical opportunities on volatility spikes.

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