Oil Prices to Hover Near $60 Amid Oversupply Concerns

Price Forecast Indicates Stability Around $60

A Reuters poll of 31 economists and analysts forecasts oil prices will remain near the $60 per barrel mark. Brent crude is projected to average $62.02 per barrel in 2026, while U.S. crude is expected to average $58.72. This stability comes despite significant geopolitical tensions that could otherwise drive prices higher.

Oversupply Outweighs Geopolitical Risks

The primary factor tempering prices is a persistent market surplus, which analysts estimate to be between 0.75 and 3.5 million barrels per day. While events in Iran, Russia, and Venezuela pose supply risks, experts believe the oversupply situation provides a substantial buffer, preventing major price spikes. The market appears to be in a lasting surplus, which is the dominant force shaping current forecasts.

Impact of OPEC+ and Global Demand

Market direction will also depend on future decisions from OPEC+, China's demand trajectory, and U.S. trade policies. The OPEC+ coalition is expected to maintain its strategy of defending a price floor without flooding the market. Meanwhile, analysts note that any significant increase in Venezuelan production will require years of sustained investment and political stability, limiting its short-term impact.

Summary

Analysts conclude that while geopolitical events create volatility, the fundamental oversupply in the oil market is expected to keep prices anchored near the $60 per barrel level for the foreseeable future. The upcoming OPEC+ meeting and shifts in global demand will be key indicators to monitor.

FAQ

Q: What is the price forecast for Brent crude in 2026?
A: The forecast average for Brent crude is $62.02 per barrel in 2026, according to the Reuters poll.

Q: Why are oil prices expected to remain stable despite geopolitical risks?
A: Analysts believe a significant and lasting market surplus, estimated at up to 3.5 million barrels per day, will offset potential supply disruptions from geopolitical tensions.

Q: What is the stance of OPEC+ on production?
A: OPEC+ is expected to continue managing production to defend a price floor while monitoring its market share, carefully increasing output only to meet rising demand.

Source: Reuters