Oil News: Will Rising Inventories and Surplus Forecasts Drag Prices Lower Next Week?

Crude Oil News Today: Prices End Higher But Traders Eye Supply Risk

Crude oil futures ended the week higher, capping a volatile five-day stretch marked by shifting geopolitical signals, unexpected inventory builds, and signs of progress in trade negotiations. Light crude settled at $61.97 per barrel on Friday, up 2.35% for the week, despite bearish pressure from both physical market indicators and diplomacy-driven supply risks.

OPEC+ and Iran Headlines Keep Supply Concerns Front and Center

Supply-side anxiety remained the dominant theme. OPEC+ is proceeding with plans to unwind production cuts, adding barrels into an already fragile demand environment. ING estimated that if U.S.-Iran nuclear talks progress, Iranian supply could return at up to 400,000 barrels per day. Market sentiment wavered further as President Trump and Iranian officials both suggested a deal was within reach, though key issues remained unresolved. With Iranian exports already trickling into China, the potential for expanded flows weighs heavily on the supply outlook.

Adding to this bearish tone, the International Energy Agency (IEA) revised its global oil supply growth estimate higher by 380,000 barrels per day, citing rising OPEC+ output. Even as the IEA slightly raised its demand projection, the agency still forecasted a surplus for the upcoming year—a signal that supply could outpace consumption even in a recovery scenario.

EIA Data Shows Surprise Inventory Build, Weakening Demand Signal

Official inventory data from the U.S. Energy Information Administration (EIA) revealed a sharp 3.5 million barrel build in crude stockpiles—far above consensus expectations of a draw. Total U.S. inventories now stand at 441.8 million barrels, reinforcing fears of sluggish demand or resilient domestic supply. The bearish inventory print followed similar findings from the American Petroleum Institute earlier in the week and added to downside pressure in futures markets, particularly on Thursday when WTI plunged more than 3%.

Trade Truce with China Offers Limited Upside Potential

On the demand side, traders found some support from a 90-day tariff pause agreed upon by the U.S. and China. The agreement, which significantly lowered trade duties between the world’s two largest oil consumers, helped revive some risk appetite. However, analysts cautioned that the short duration and lack of detail limited the longer-term demand optimism. Meanwhile, the Federal Reserve remains a wildcard, with potential rate cuts offering a possible but uncertain economic tailwind.

Crude Oil Prices Forecast: Bearish Bias Remains Despite Weekly Gain

Despite a modest weekly rise, the crude oil market retains a bearish short-term bias. Growing physical supply risks from OPEC+ and a potential Iran deal continue to cap upside potential. Unless inventories decline meaningfully or demand rebounds strongly, the near-term oil prices forecast leans lower, with traders watching closely for further developments on the diplomatic and inventory fronts.

Technically, look for an upside bias to develop on a sustained move over $63.06 and for the weakness to resume on a sustained move under the pivot at $60.09.

More Information in our Economic Calendar.