Oil prices plummet as Brent crude hits $62.18 amid supply surplus fears.
Oil prices dropped on Wednesday amid growing investor concerns over an impending global oil supply surplus and heightened U.S.-China trade tensions, both exerting downward pressure on the market. The outlook, shaped by the International Energy Agency’s (IEA) forecast and continuing geopolitical frictions, led to extended losses for crude prices following a turbulent session on Tuesday.
The main factor behind the decline in oil prices is the IEA’s recent warning about a substantial supply surplus expected in 2026. According to the agency’s forecast released on Tuesday, the global oil market is poised to face a glut of up to 4 million barrels per day (bpd) next year. This surplus represents nearly 4 percent of worldwide demand and is significantly higher than previous estimates of around 3.3 million bpd.
The surge in supply is driven by OPEC+ producers, including Russia and other allies, who are accelerating the rollback of previous output cuts faster than initially planned. This aggressive increase in production has stoked fears of oversupply, which has pressured prices throughout 2025. The IEA also raised its supply growth estimate for this year to 3 million bpd from an earlier forecast of 2.7 million bpd, while demand growth projections have been reduced, signaling a mismatch that favors excess supply.
The crude oil benchmarks have reflected this oversupply anxiety. On Wednesday, the West Texas Intermediate (WTI) crude price hovered around $58.56 per barrel, down slightly from recent levels, with the market extending a losing streak that saw prices hit a five-month low. Brent crude prices similarly exhibited weakness, trading in a declining trend around $62.18 per barrel according to technical analyses projecting further downward pressure in the near term.
The overall trend suggests sellers remain in control, with key technical signals indicating attempts to rally may be short-lived unless key resistance levels are broken decisively. Analysts expect Brent prices to test resistance near $65.35 per barrel but predict potential declines below $59.25 should the bearish momentum prevail.
Source: Economymiddleeast