Oil Prices Forecast - Oil Hold WTI at $63 and Brent at $68 While New Supply and IEA Surplus Weigh on the Market

WTI (CL=F) and Brent (BZ=F) – current price map and direction

WTI (CL=F) trades around the low $60s, roughly $62–$63. Brent (BZ=F) holds near $67–$68 after a drop of almost 3% and only a modest rebound. The curve is flattening, not signaling shortage. Prices are low enough to pressure higher-cost producers but not low enough to force immediate emergency cuts. The important point is that the move is driven by inventories, revised demand and visible supply growth, not by a one-off shock. Bounces are being sold quickly, which tells you the default direction is sideways to lower unless fundamentals flip.

Macro backdrop – softer inflation, but no demand rescue for CL=F and BZ=F

The latest U.S. inflation data came in softer, with gasoline prices falling over 3% month-on-month. That reduces pressure for aggressive rate hikes and marginally supports risk assets through a weaker dollar channel. For oil, the impact is limited because the demand side is not accelerating. The IEA projects that in 2026 global supply will exceed demand by roughly 3.7 million barrels per day, close to 4% of total consumption. This is a clear oversupply signal. Monetary policy risk is easing at the margin, but demand growth is being revised down while supply growth is locked in. For WTI (CL=F) and Brent (BZ=F) this macro setup does not justify a sustained bull phase at current levels.

OPEC+ path into April – March 1 as the key turning point

OPEC+ meets on 1 March to decide what happens from April 2026. Quotas were lifted by roughly 2.9 million barrels per day between April and December 2025 and then frozen for Q1 2026. Internal data now show demand for OPEC crude easing in Q2, so the block is looking at a small surplus even before additional hikes. Any decision to resume output increases from April is structurally bearish for CL=F and BZ=F unless deep cuts appear elsewhere. Some members want volume to protect fiscal budgets, others prefer price stability. The market is already pricing a realistic chance of new barrels coming from April, which is one reason Brent (BZ=F) cannot hold a stable floor above the low $70s.

Venezuela and non-OPEC supply – more medium-sour barrels competing with Brent

Sanctions relief has opened the door for Chevron, BP, Eni, Shell and Repsol to scale activity in Venezuela again. That means a gradual return of Venezuelan crude into the Atlantic Basin, particularly medium-sour grades that refiners like for diesel and heavy products. Those flows join rising supply from the U.S., Brazil and Guyana, reinforcing the IEA’s oversupply story. For WTI (CL=F), extra Latin American barrels compete directly into the Gulf Coast and export markets. For Brent (BZ=F), more Atlantic Basin supply makes it harder to sustain a premium without a shock. The physical picture is moving from constrained to comfortable.

Demand profile – slow growth against fast supply expansion

The IEA has cut demand growth expectations for 2026, describing a year where supply runs ahead of consumption. Europe is still digesting high energy costs and weak industrial output, which caps incremental crude demand. China’s strong electric-vehicle push has not eliminated oil demand and EV sales stumbled after subsidy changes, which keeps demand stable rather than explosive. India is exploring more gas-fired generation to stabilize its grid, pulling some marginal demand away from liquids into gas. Taken together this is not a collapse in demand, but it is clearly slow-growth demand facing fast-growth supply. In that regime WTI (CL=F) and Brent (BZ=F) usually settle in a lower trading band with rallies repeatedly capped unless something breaks on the supply side.

Geopolitical premium – still in the price but no longer the main driver

There is still a $5–$7 per barrel geopolitical premium embedded in crude to reflect war risk around Russia, tensions in the Middle East and shipping route disruptions. Attacks on Russian energy infrastructure and the constant tail-risk of an Iran-linked escalation are not gone. Peace or ceasefire processes remain fragile. However, fundamentals are currently overwhelming that risk premium. Inventories are rising, the IEA calls for a multi-million barrel surplus, and OPEC+ is talking about adding supply. The premium acts as insurance and provides a floor, but it is not strong enough on its own to push CL=F or BZ=F into a sustained bull run.

Energy equities vs crude – lower beta to oil, and what that means for CL=F / BZ=F

A long data study on European integrated names such as BP, Shell, TotalEnergies, Equinor, Eni, Galp, OMV and Repsol shows their share-price sensitivity to Brent (BZ=F) has dropped materially over the last two decades. Dividend breakevens sit close to $50 per barrel after capex flexibility, compared with around $100 in 2012. A higher share of revenue now comes from gas, trading, mobility services and low-carbon activities. These companies are still more sensitive to falling oil prices than to rising ones, but the amplitude of that sensitivity has declined. For crude, this means CL=F and BZ=F can drift lower without immediately triggering violent equity capitulation that would force abrupt supply discipline. That lowers the probability of a reflexive equity-driven crude squeeze and supports a scenario of extended sideways-to-lower trading.

Pipelines and flow capacity – Enbridge and the high-throughput, low-margin regime

Midstream results confirm that physical volumes remain strong even in a softer price environment. Enbridge delivered record adjusted EBITDA of roughly $14.7 billion for 2025, about 7% growth year on year, and adjusted earnings per share up about 9%. The company sanctioned Mainline Optimization Phase 1, adding 150,000 barrels per day of takeaway capacity from Western Canada by 2027, including a 100,000 bpd expansion of the Flanagan South system toward the U.S. Gulf Coast. The Eiger Express gas pipeline was upsized in response to higher Permian demand. For WTI (CL=F) this means logistical bottlenecks are easing; inland barrels have reliable paths to coastal hubs and export facilities. Infrastructure is being built for a world of high throughput and modest margins, not for chronic shortage pricing. That reinforces the idea of abundant deliverable supply at current price levels.

Inventory trend, IEA surplus call and what it means for price bands

Recent U.S. data showed crude stocks rising by around 8.5 million barrels in just one week to roughly 429 million barrels, a build significantly above consensus. Combine that with the IEA projection of a 3.7 million barrels per day surplus in 2026 and you get a very clear signal: the market is moving into oversupply territory, not scraping the bottom of the tank. OPEC+ still sits on meaningful spare capacity and is openly discussing additional barrels from April. Venezuelan exports are on a slow upward path. In this configuration WTI (CL=F) does not justify a structural premium in the mid-$70s and Brent (BZ=F) does not justify a stable floor in the high-$70s without shock events. The more logical band is WTI anchored around the high-$50s to mid-$60s and Brent gravitating toward the mid-$60s to low-$70s, with deviations driven by political noise.

Technical structure – key levels for WTI (CL=F) and Brent (BZ=F)

Technically, WTI (CL=F) shows immediate support around $60–$61 and deeper structural support in the high $50s. Resistance sits near $66–$68, where previous rebounds stalled. Momentum indicators point to consolidation, not a strong trend, with a slight downward bias as rallies fade before breaking resistance. Brent (BZ=F) has first support around $65–$66 and a stronger floor if needed in the $62–$63 region. Resistance comes in around $70–$72, which is where supply headlines and profit-taking kept a lid on earlier advances. Unless OPEC+ pivots or there is a material outage, any push toward those resistance bands is more likely to be sold than extended.

Positioning and verdict – Oil is a Hold with a bearish tilt

Current prices around the low $60s for WTI (CL=F) and high $60s for Brent (BZ=F) sit inside a fundamentally soft environment: inventories are building, the IEA flags a 3.7 million bpd surplus for 2026, OPEC+ is discussing output hikes rather than emergency cuts, Venezuela is re-entering the market and non-OPEC supply from the U.S., Brazil and Guyana is still ramping. A geopolitical premium of roughly $5–$7 per barrel is present but not expanding. In this setup, aggressive long exposure in CL=F or BZ=F is not justified by the data. The rational stance is Hold with a bearish bias. Strength toward the upper resistance zones, roughly the high $60s for WTI (CL=F) and low $70s for Brent (BZ=F), is better used to reduce overweight crude positions rather than to initiate new longs. A true long opportunity would require a visible change in OPEC+ policy, a clear upside surprise in demand, or a major disruption that actually eats into the projected surplus. Until one of those triggers appears, the weight of evidence favors continued pressure on oil prices and a higher probability of testing lower support than of sustaining a break to $80+ levels.

That's TradingNEWS