By Frank Walbaum, Market Analyst at Naga
WTI crude oil futures retreated below USD 61 per barrel on Tuesday, as persistent oversupply fears overshadowed recent OPEC+ policy decisions. Forecasts of a significant global surplus by 2026, potentially as high as 4 million barrels per day, could continue to weigh on sentiment and push prices lower.
Surging output from non-OPEC+ producers, including the United States, Brazil, and Canada, could drive the expected supply glut. However, OPEC+’s decision to pause further production hikes through the first quarter of 2026 could limit downside risks to some extent.
Compounding the bearish outlook are soft demand signals. Mixed factory data in Asia, weak global manufacturing PMIs could cap buying appetite from importers.
While supply risks remain, including the impact of US sanctions on Russian oil majors and the effects on geopolitical tensions on energy infrastructure in Eastern Europe, the market could continue to see downside pressure. Meanwhile, the market turns to the upcoming data from the API and EIA for hints on demand strength.