Oil News: Weekly Crude Oil Analysis Flags Oversupply Risks as Traders Monitor OPEC

WTI Climbs Modestly as Traders Weigh Geopolitics, Supply Growth, and Softening Demand

WTI crude futures ended the week slightly higher at $58.55, up 0.84%, as traders assessed the interplay between geopolitical developments, expanding global supply, and escalating concerns about weakening demand. Market direction remained confined, with the January contract holding above $58 while Thanksgiving-related lighter volumes curtailed activity.

Technically, light crude oil futures straddled a pair of retracement levels at $58.23 and $59.39 most of the week. This area is slightly higher than the major support area created by a pair of main bottoms at $55.91 and $55.22.

Despite this attempt to form a support base, the market still has to overcome the 52-week moving average at $62.06 to indicate a shift in the trend and the long-term pivot at $63.59 to fuel an acceleration to the upside.

Peace Talks and Sanctions Shape Crude Oil News Today

Expectations of progress on Russia-Ukraine peace negotiations carried outsized influence on sentiment. White House signals suggesting optimism supported a mid-week bounce, although the potential return of Russian supply weighed on prices.

Goldman Sachs estimated that a peace deal could remove as much as $5 per barrel from crude by reducing the geopolitical risk premium. At the same time, U.S. sanctions on Rosneft and Lukoil—effective November 21—generated uncertainty around Russian availability. These sanctions target roughly half of Russia’s crude production and increase the costs and risks associated with exporting barrels.

Russian shipments have not collapsed, but volumes are building on water as buyers in India and China reconsider their purchasing strategies, with India’s intake projected to fall to a three-year low in December.

Oversupply Concerns Dominate Oil Prices Projections

Supply expectations remain firmly on the bearish side. The IEA projects global output to rise by 3.1 million barrels per day in 2025 and another 2.5 million barrels daily in 2026, while global inventories reached their highest reading since July 2021.

U.S. commercial crude stocks increased by 2.8 million barrels to 426.9 million, and gasoline inventories rose by 2.5 million. Refineries ran at 92.3% of capacity, and U.S. crude production continues to set records, with the EIA forecasting 13.6 million barrels per day in both 2025 and 2026.

Efficiency improvements in the Permian Basin have sustained production even as rig counts have dropped sharply since late 2022.

OPEC+ Policy Steady as Demand Softens

OPEC+ is expected to maintain its current posture at the November 30 meeting, reinforcing its pause on production increases through early 2026. The group has steadily unwound voluntary cuts this year, adding about 137,000 barrels per day in each of October, November, and December.

Still, the EIA expects OPEC+ output to average roughly 1.3 million barrels per day below stated targets next year given projected inventory builds. On the demand side, the IEA continues to mark growth lower, revising third-quarter demand to 920,000 barrels per day year-over-year but holding full-year 2025 and 2026 growth estimates below 800,000 barrels daily.

China’s consumption has plateaued as EV penetration and LNG trucking reduce gasoline and diesel needs.

Oil Prices Forecast: WTI Outlook Remains Bearish

The near-term trend points lower. The EIA expects WTI to average $58.65 in Q4 2025 before falling to $50.30 in Q1 2026 and holding in the low-$50s next year. Its full-year forecasts stand at $65.15 for 2025 and $51.26 for 2026. Standard Chartered is more constructive, projecting $65.40 in 2025 and $59.90 in 2026, while J.P. Morgan sees $63 this year and $54 next year.

Traders highlight $55 as a critical support level identified by analysts, with the risk of further losses should that floor fail. Overall, surging non-OPEC supply, softening Chinese demand, and uncertainty surrounding Russian exports reinforce a bearish short-term outlook for WTI.

Technically, the market will remain weak until buyers can overcome the 52-week moving average at $62.06 with conviction.

More Information in our Economic Calendar.