Oil Price Forecast - Oil Slip Toward $60 as Oversupply Grows and Tanker Rates Explode

Global Oil Price Setup: WTI CL=F and Brent BZ=F Around $56–$60

WTI CL=F at $56.6 and Brent BZ=F at $60.4 Under Pressure from Oversupply and Costly Freight

 WTI CL=F trades near $56.6 with a daily drop of about 1.3–1.4%, while Brent BZ=F sits around $60.3–$60.4, down roughly 1.2–1.3%. Murban holds near $61.34, Louisiana Light near $59.62, the OPEC Basket around $61.28, and Mars US near $70.36, with Gasoline futures close to $1.729 and Natural Gas near $4.02. The curve is not collapsing, but price action clearly leans lower, with every bounce in WTI and Brent still treated as a selling opportunity rather than an entry point for a new uptrend.

Middle East Benchmarks and Murban’s Weakening Premium

Abu Dhabi’s Murban grade has seen its premium over Brent BZ=F narrow to the weakest level since early October, showing refiners are no longer willing to bid aggressively for Middle Eastern light crude even with freight advantages into Asia. At the same time, the Dubai benchmark’s discount to Brent has widened to the largest spread in about seven weeks, with the Brent–Dubai EFS signaling a market that is more than adequately supplied with medium sour barrels. The combination of a cheaper Murban and a wider Dubai discount says the same thing in different ways: there is ample Middle Eastern crude available at a time when demand is not strong enough to absorb it at higher differentials.

Saudi OSP Cuts and the OPEC+ Market-Share Play

Saudi Arabia reacted to weaker spot benchmarks by cutting its official selling prices for crude into Asia for January to the lowest premium in five years. That is an explicit move to defend market share, not price. The decision came as OPEC+ increased production through December, with Saudi output rising the most in absolute terms given its large quota. Official rhetoric still projects a bullish demand outlook for 2026, but cutting differentials at this magnitude while Brent BZ=F trades close to $60 exposes a different reality: producers are worried enough about losing barrels in Asia that they are willing to cheapen pricing to keep flows locked in.

Banks’ 2026 Outlook: Brent Under $60, WTI CL=F Even Lower

Most major investment banks now expect Brent BZ=F to average below $60 next year, with WTI CL=F trading at an even deeper discount. One house explicitly calls for Brent to slip toward $60 in early 2026, effectively right where the benchmark is trading already. These forecasts sit alongside OPEC’s firmer demand narrative and the IEA’s trimmed glut forecast, but the pricing projections are blunt: in a world of rising supply and tepid demand, the path of least resistance for oil remains sideways to lower in the absence of a major supply shock.

Non-OPEC Supply and the Growing Surplus Risk

A key commodities strategist underscores that the surplus in the oil market is set to expand in 2026 as OPEC+ unwinds production cuts faster than markets had anticipated and non-OPEC supply continues to grow “at a healthy clip” despite price weakness. Canadian producers such as Cenovus and Suncor are preparing to lift output into 2026, while U.S. production remains robust enough to keep pressure on WTI CL=F around $56–57. On top of that, Russia continues to push discounted barrels into Asia, with India’s imports of Russian crude heading toward a six-month high, ensuring constant competition for Middle Eastern and Atlantic Basin barrels.

Demand Signals from Asia, EV Growth, and Refinery Behavior

On the demand side, the picture is not catastrophic but clearly insufficient to absorb the supply wave at higher prices. Chinese refinery runs have climbed sharply despite seasonal maintenance, indicating that refiners see value in lifting crude around $60 Brent and mid-$50s WTI. At the same time, China’s coal and gas power generation is on track for its first annual decline in a decade, showing an evolving energy mix rather than a linear demand surge for liquids. In developed markets, global EV growth has slowed, with U.S. demand cooling and China’s EV adoption leveling off. That modestly supports oil in the long term because substitution pressure is weaker than previously modeled, but in the current configuration it does not offset the oversupply from OPEC+, Russia, the U.S., and Canada.

Tanker Market Squeeze: 467% Rate Explosion and Its Impact on Crude

The freight side of the chain is in a completely different regime. Daily rates for crude tankers have surged by about 467% this year as sanctions on Russia, Venezuela, and Iran, plus rerouting around risk zones, force longer voyages and inefficient fleet usage. Supertanker utilization is projected to hit around 92% in 2026, up from roughly 89.5% in 2025, a seven-year high. Several new-build VLCCs have even left Asian yards empty to steam directly toward producers in the Middle East, the Americas, and Africa, instead of loading products in Asia on their maiden voyages. For crude benchmarks, this means higher delivered costs, heavier pressure on refinery margins, and an additional brake on how far WTI CL=F and Brent BZ=F can climb before buyers step back.

Sanctions, Shadow Fleet, and Trade Route Disruptions

Sanctions on Russia’s major producers and exporters, alongside enforcement against the “shadow fleet” carrying Russian barrels, have tightened the logistics but not removed Russian crude from the market. Instead, flows have been rerouted via longer routes and less efficient shipping structures, again pushing freight costs higher. Additional U.S. actions targeting Venezuelan and Iranian flows add more friction to trade routes and increase voyage times. The net effect is not a clean supply cut that would lift prices; it is a structural rise in transport cost layered on top of an oversupplied crude market, which keeps pressure on refiners and caps the upside in headline benchmarks.

Producer Discomfort: Kuwait’s $60–$68 “Fair Value” Band

Kuwait’s oil minister has described the latest leg down in crude prices as a “sudden drop” that surprised producers who had expected prices to hold or improve from previous levels. He explicitly framed a “fair” price band of $60–$68 per barrel under current fundamentals. With Brent BZ=F at roughly $60–61, the market is pressing the bottom edge of that political comfort zone, while WTI CL=F at around $56–57 is already below it. That gap matters: the closer Brent trades to the bottom of the $60–$68 window, the more likely it becomes that OPEC+ rhetoric hardens and producers push for stronger compliance or additional measures to prevent a deeper slide.

Short-Term WTI CL=F Structure: $55 Target under Persistent Selling

Technically, WTI CL=F continues to trade like a market where sellers control every bounce. Intraday strength has repeatedly failed, and the path toward $55 remains the dominant scenario as long as prices stay capped below $60. Momentum studies treat the market as oversold but not yet at a capitulation extreme that would force a violent short squeeze. With demand described as weak and oversupply repeatedly highlighted, rallies into the high-50s are still being treated as short opportunities by trend-following money until the tape proves otherwise with a decisive recovery through the $60 handle.

Short-Term Brent BZ=F Structure: $60 Floor, $63.5 Ceiling

For Brent BZ=F, the key levels are compressed but clear. The $60 mark is acting as a psychological and technical floor; a sustained break below $59–60 would confirm that the market is starting to “fall apart” from this range and open a slide toward the mid-50s. On the upside, the downtrend line and the 50-day EMA sit together near $63.5, forming a heavy resistance cap. Unless Brent can clear roughly $63.5 with real volume and follow-through, any move from $60 to $63 remains a counter-trend bounce within a broader bearish structure driven by oversupply from Russia, OPEC, and U.S. producers.

Macro Setup for 2026: Oversupply Risk vs. Policy Reaction Risk

Going into 2026, the macro picture for Oil, WTI CL=F, and Brent BZ=F is defined by two opposing forces. On one side, the market faces rising supply from OPEC+, the U.S., Canada, and Russia, elevated tanker capacity utilization, and producer comments that still assume a world of adequate demand but not explosive consumption growth. On the other side, there is clear producer discomfort once Brent trades near $60, an explicit $60–$68 “fair value” band from Kuwait, and the constant option for OPEC+ to slow or reverse the pace of its cuts unwind if prices move too far below that range. Until one of these forces clearly dominates – either a sharper demand slowdown that drags Brent decisively below $60, or a coordinated producer response that restricts supply – WTI CL=F around $56–57 and Brent BZ=F around $60–61 remain consistent with a market that is oversupplied, freight-tight, and structurally biased to sell strength rather than chase any short-term bounce.

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