Oil Price Forecast - WTI Near $59.78 And Brent $64.38 As Iran Tensions Clash With Venezuela’s Oil Return

WTI CL=F And Brent BZ=F: Oil Trades Around $60–$64 After A Violent Iran-Driven Whipsaw

Intraday Tape: WTI CL=F Near $59.78, Brent BZ=F Around $64.38 After A $4 Round-Trip Week

Front-month light crude futures spent one of the most volatile weeks in months, swinging from a low near $58.45 to a high around $62.36 before settling at roughly $59.17 on Thursday, barely $0.05 higher for the week. Spot benchmarks now sit with WTI CL=F quoted around $59.78 (up $0.59, or +1.0%) and Brent BZ=F near $64.38 (up $0.62, or +0.97%). The rest of the barrel confirms a modestly firmer complex: Murban trades around $65.27 (+0.71%), Louisiana Light near $63.59 (+2.9%), Mars US around $70.06 (down 1.3%), the OPEC Basket at $62.77 (down 0.84%), and gasoline futures about $1.792/gal (+0.45%). Crude has effectively gravitated back to a high-$50s / low-$60s equilibrium, but the path to that level – and the drivers beneath it – are what matter for the next move in WTI CL=F and Brent BZ=F.

Trump–Iran Premium: $4 Swing In CL=F On A War-Or-No-War Headline Cycle

The entire week was defined by a binary question: does Trump order another strike on Iran or not. Early in the week, large-scale protests in Iran and a violent crackdown created the sharpest Middle East supply scare since mid-2025. Iran pumps roughly 3.2 million b/d, about 4% of global crude output, but the real leverage is geographic: nearly 20 million b/d – roughly one-fifth of global production – transits the Strait of Hormuz. As the US President canceled meetings with Iranian officials and publicly declared that “help is on its way” to protesters, traders immediately priced in the risk of strikes on Iranian assets or shipping. That shifted WTI CL=F from the high-$50s toward the low-$60s in a matter of sessions as hedging flows and speculative longs chased the upside. Then Trump abruptly cooled the rhetoric, downplaying the likelihood of a wider conflict and dismissing talk of executions in Iran. The same contracts that had rallied on war risk sold off aggressively, knocking light crude back toward $59–$60 and compressing the weekly gain to almost nothing. Oil is therefore not trading on a traditional slow macro drift; it is being yanked in $3–$4 clips by the probability assigned to a single decision out of Washington.

Weekend Hedging: CL=F Bid Returns As US Forces Move Toward The Middle East

European trade on Friday underscored how sensitive CL=F remains to headline risk. During a quiet FX session with little data, crude stood out as the only strong mover, with prices “surging throughout the session” on what looked like classic weekend hedging. A US media report that air, land and sea assets were moving toward the Middle East, with transit expected to take around a week, pushed traders to put risk back on before the Friday close. The logic is simple: a single unexpected escalation over the weekend – missiles, drones, or a maritime clash – can gap WTI CL=F and Brent BZ=F several dollars higher before liquidity properly opens. In that environment, even desks that fundamentally believe Trump wants to avoid a major war still pay for insurance, because the path risk into Monday is asymmetric.

Trump’s $50 WTI Objective Versus Market Reality At $60 CL=F

Overlaying the Iran noise is Trump’s stated oil preference: a “lower prices” policy with a notional target around $50 WTI to keep fuel cheap for US consumers and industry. That target appears in market chatter as a proxy line for where policy pressure would increase if WTI CL=F pushed too far above perceived fair value. The problem is that $50 WTI is well below the current $59–$60 tape and uncomfortably tight for many US producers – particularly high-cost shale basins and Venezuelan projects that require higher realized prices to justify reinvestment. Industry commentary already flags the trade-off: a deliberate drive toward $50 CL=F would stabilize pump prices but squeeze the margins and cash flows of US independents and undermine the economics of any new capital going into sanctioned or higher-risk jurisdictions. With CL=F almost $10 above that notional policy line and geopolitical risk elevated, the market is currently trading nearer the level required to keep producers solvent than at the level politically ideal for the White House. That tension is part of the medium-term setup for oil equities and for how long the administration will tolerate risk-driven spikes above $60.

Venezuelan Barrels: Structural Bearish Anchor Beneath BZ=F Even As Geopolitics Lifts The Front

At the same time that Iran headlines inject upside risk into WTI CL=F and Brent BZ=F, the return of Venezuelan crude has quietly put a cap on how far those benchmarks can run in the absence of an actual supply outage. The US has sold its first Venezuelan oil cargo for roughly $500 million, and shipping firms are scrambling to add capacity for Venezuelan transfers as they position for more exports. Enverus projections (from the material you provided) point to Venezuela potentially lifting output by around 50% by 2035, a long-dated number but one that reshapes expectations for medium sour supply into the US Gulf and Asia. US majors are visibly re-engaging: Chevron is expanding operations and already appears offloading Venezuelan crude at US ports, while smaller players and trading houses build logistics chains around these flows. All of this increases the downside anchor under Brent BZ=F: whenever prices lurch higher on Middle East risk, traders can point to a growing pipeline of Venezuelan barrels that will be monetized aggressively on any sustained rally, limiting the ability of BZ=F to sustain prices far above the mid-$60s to low-$70s band without a genuine multi-million-barrel disruption.

OPEC And OPEC+ Policy: Bullish Demand Narrative, Patchy Compliance And India As The New Battleground

OPEC’s latest monthly report rolls out its first 2027 demand growth view, projecting an additional 1.34 million b/d of global oil demand, built on assumptions of “strong economic activity” and a slower roll-out of biofuels. On paper, that forecast is supportive for both CL=F and BZ=F, because it implies sustained call on OPEC crude in the second half of the decade. The group’s behavior today, however, shows the usual mix of discipline and slippage. Nigeria has missed its OPEC+ quota for five straight months, under-delivering supply relative to commitments, while Kazakhstan cut its December output by about 230,000 b/d, partly to align more closely with the agreement. At the same time, OPEC is pushing more barrels into India, raising exports there as Russian flows slump under sanctions and freight complications. Indian oil companies are actively seeking alternatives – turning even to Ecuadorian crude to backfill gaps – which gives OPEC core producers leverage in pricing and volumes. For Brent BZ=F, that means the medium-term demand floor is firm – OPEC sees more barrels needed by 2027 – but near-term, increased shipments to India and patchy quota compliance can still add incremental supply that pushes prices back toward the low-$60s when geopolitics cools.

Russian Revenues, Sanctioned Fleet And The Shifting Atlantic Barrel Mix

Russia’s oil receipts have slumped, putting pressure on Moscow’s budget, while sanctioned tankers are pivoting under the Russian flag to secure greater protection and access to shadow logistics. The US has issued new warrants to seize Venezuelan-linked tankers, and US authorities have already detained at least one empty vessel that departed Venezuelan waters in early January. This legal and sanctions pressure is forcing refiners and traders, especially in Europe, to reassess their barrel mix. Some European refiners have stopped buying Kazakhstan’s CPC Blend after a triple drone attack near Russia’s Black Sea coast, which sent CPC differentials into a discount versus dated Brent. As a result, Atlantic Basin demand is being redirected toward Mars US (around $70.06), Bonny Light (around $78.62, currently under pressure at -2.84%), and other non-Russian crudes, while SOCAR’s Azeri gas exports into Germany and Austria further erode Russia’s leverage on the gas side. For BZ=F, this means a more fragmented but still adequately supplied Atlantic market: risk premia spike on isolated incidents like Black Sea drone strikes, but structurally, the system is adjusting with Azeri gas, increased OPEC shipments and US barrels filling gaps.

China And India Demand: Record 13.18 Million b/d Chinese Imports Support CL=F Floor

Demand-side data out of Asia is one of the clearest supports under WTI CL=F and Brent BZ=F at current levels. China’s customs figures show December crude imports jumping 17% year-on-year to 55.97 million tonnes, which translates into around 13.18 million b/d, a new all-time high. This surge is driven by cheap Russian barrels, opportunistic purchases of discounted grades and refining system runs aimed at both domestic consumption and product exports. At the same time, China is adding massive power capacity: it leads global coal additions but is also investing heavily in renewables and grid infrastructure, including a planned $574 billion grid investment surge. That mix means oil demand is not collapsing; instead, crude is locked into transport, petrochemicals and industrial uses even as the power stack gets greener. India’s coal output climbed 3.6% in December, and its crude intake profile is shifting as sanctions push Russian flows lower and OPEC fills the gap. Both economies are signaling that oil demand in 2026 is more robust than many transition narratives assume, and that underpins a fundamental floor in CL=F and BZ=F around the high-$50s as long as growth does not break.

US Shale Response: Harold Hamm’s Bakken Pause And A Devon–Coterra $44B Puzzle

At sub-$60 WTI, the US shale patch is already flashing signs of strain. Billionaire Harold Hamm has reportedly halted drilling in the Bakken as low prices squeeze returns, confirming that parts of US shale remain highly sensitive to CL=F levels. At the same time, consolidation continues: Devon Energy (NYSE:DVN) and Coterra Energy (NYSE:CTRA) are exploring a potential merger that would create a $44 billion independent with roughly 1.6 million boe/d of output. For the oil tape, that combination signals two things. First, marginal barrels will increasingly come from bigger, low-cost, consolidated operators rather than small, highly leveraged drillers. Second, unit costs and capital discipline will likely tighten supply if WTI CL=F drifts too far below $60, as even large producers prioritize cash return over volume growth. Equity holders watching DVN, CTRA and other US names will track insider transactions closely as a tell on management conviction at these price levels; sustained insider buying into a $59–$60 CL=F tape would reinforce the idea that management teams see value in the strip rather than expecting a structural slide toward Trump’s $50 target.

Inventory And Product Data: Large Builds Cap Immediate Upside For CL=F

Despite the geopolitical fireworks, recent data highlighted large crude and product builds that weighed on prices earlier in the week. Storage increases in both crude and refined products signal that some of the rally into the low-$60s outran near-term physical demand, giving refiners room to scale back bids without risking shortages. Those builds explain why WTI CL=F stalled in the $62–$63 range and snapped back to the high-$50s once Iran war fears faded, even before the weekend hedging flows reappeared. On the logistics side, Maersk has resumed traffic on key Red Sea routes, easing some of the freight premium that had crept into crude and product prices during earlier disruptions. As long as inventories are comfortable and major shipping lanes remain operational, rallies in CL=F and BZ=F into the mid-$60s will face resistance unless there is a genuine physical outage.

Citi’s $70 Brent Call Versus Spot BZ=F At $64.38

One of the cleaner medium-term markers on the street is Citi’s view that Brent could trade around $70 in the near term as geopolitical risks accumulate. With Brent BZ=F now quoted near $64.38, that call implies around $5–$6 of upside – roughly 8–10% – if risk premia remain elevated and OPEC does not immediately flood the market. For a trader looking at the strip, the combination of OPEC’s 1.34 million b/d 2027 demand growth forecast, ongoing Middle East tension, and US policy uncertainty justifies a modest bullish bias on BZ=F toward that $70 zone. However, Venezuelan flows, US shale discipline and inventory builds limit the case for a sustained break above $70–$72 without a structural supply shock. In other words, the risk-reward from $64 favors a grind higher into the high-$60s, not an explosive move into the $90s.

Macro Overlay: Strong US Data, Higher Yields And Oil’s Relationship With The Dollar

Macro conditions are feeding directly into the oil curve. Strong US jobless claims at 198K have pushed Treasury yields higher, with markets pricing out near-term Fed cuts and reinforcing the belief that US growth can absorb higher real rates. A firmer dollar would normally pressure commodities, but in this case the growth signal and the geopolitical risk premium are dominating. European trading desks described a “steady” FX session but a clear bid in crude as traders hedged Middle East risk into the weekend, even as yields marched higher. That tells you WTI CL=F and Brent BZ=F are trading more as risk-event assets than as simple macro hedge instruments; they are responding to the probability of discrete shocks (Iran, Venezuela sanctions, tanker attacks) more than to incremental tweaks in the dollar index.

Sentiment, Fear And The Lessons From December’s Divergence

The December “Extreme Fear” episode in crypto – where fear gauges dropped to 20/100 while BTC and ETH only fell 3–5% from highs – provides a useful template for how to read sentiment around oil. In late December, headline flow around ETF outflows, flash crashes and wallet incidents created panic that was not confirmed by structural price damage. Now, in crude, a different but analogous pattern is visible: headlines about Iran, tanker seizures and Venezuela policy generate outsized volatility in CL=F and BZ=F, but the market keeps settling back into the $58–$60 WTI / $63–$65 Brent range. That behavior suggests traders are willing to fade extreme fear spikes as long as physical balances and OPEC policy do not break. For positioning, it means that sells into every Iran scare are dangerous, while buys into every Venezuela headline are equally risky; the real edge is in recognizing when sentiment has swung too far away from the actual supply-demand math.

Strategic Context: Europe’s Gas Re-Wiring And Long-Term Demand For BZ=F

The SOCAR gas exports to Germany and Austria via the Trans-Adriatic Pipeline (TAP) highlight how Europe is rewiring its gas supply away from Russia. TAP is part of a $30+ billion, 878 km Southern Gas Corridor that gives the EU an alternative route to Azeri gas. The EU has also agreed to permanently phase out Russian gas, targeting a full LNG import phase-out by December 31, 2026, and the end of pipeline gas by September 30, 2027. For Brent BZ=F, this is a slow-burn headwind rather than an immediate shock: as gas security improves, the risk of extreme oil-for-gas substitution episodes declines, reducing one source of upside volatility. However, the same policy push is also driving large-scale offshore wind investment – the UK just contracted 8.4 GW of new capacity at £90.91/MWh – and aggressive electrification across Europe. Over the multi-year horizon, that erodes some transport and heating demand for oil-linked products, even if petrochemical and aviation demand remain strong. For pricing, it means that structural upside in BZ=F will increasingly require supply-side shocks or deliberate OPEC restraint rather than demand surprises from Europe.

WTI CL=F And Brent BZ=F Levels To Watch: Support, Resistance And Invalidation

On the chart, WTI CL=F has carved out a support shelf around $58.50–$59.00, defined by this week’s low near $58.45 and the repeated ability of buyers to step in just below $60. The first resistance band is $62–$63, the zone that capped the Iran-risk spike near $62.36. Above that, traders will focus on the high-$60s as the area where US policy pressure and Venezuelan hedging flows intensify. For Brent BZ=F, the immediate support is the $62–$63 region, followed by a deeper floor in the high-$50s if risk premium evaporates. Resistance sits around $66–$67 initially and then at the $70 target flagged by Citi. A weekly close for CL=F under $58 or for BZ=F under $60 would signal that the combination of Venezuelan barrels, inventory builds and weaker macro demand is overpowering geopolitical risk. Conversely, sustained closes above $63 WTI / $67 Brent, without a visible supply outage, would suggest that the market is front-running tighter balances or anticipating more aggressive OPEC restraint than is currently in guidance.

Investment Verdict On CL=F And BZ=F At ~$60 / ~$64: Buy, Sell Or Hold

Taking all of the data together – WTI CL=F at roughly $59.78, Brent BZ=F near $64.38, a $4 range in light crude this week (from $58.45 to $62.36), OPEC’s 1.34 million b/d 2027 demand growth call, record Chinese imports at 13.18 million b/d, Venezuelan exports returning with a path to 50% output growth by 2035, Nigerian and Kazakh OPEC+ dynamics, Citi’s $70 Brent near-term view, Harold Hamm’s Bakken drilling halt, a potential $44 billion Devon–Coterra consolidation, large but manageable inventory builds, resumed Red Sea shipping, US forces moving toward the Middle East, and Trump’s notional $50 WTI preference – the balance tilts one way. At current levels, WTI CL=F and Brent BZ=F justify a Buy rating with a moderately bullish bias, with a tactical upside target around $65 WTI / $70 Brent anchored by the Citi call and the geopolitical premium, and a risk floor in the mid-$50s WTI / high-$50s Brent defined by US producer break-evens and Venezuelan plus OPEC supply. The bull case is invalidated if CL=F loses the $58 shelf and BZ=F breaks $60 in the absence of a clear macro shock; as long as those levels hold and Middle East tensions plus Asian demand remain in play, risk-reward favors being long crude on dips rather than shorting every rally in a market that is one Trump decision or one regional incident away from another $3–$4 gap higher.

That's TradingNEWS