Core Viewpoint - The international crude oil prices have dropped to near five-year lows due to a global supply surplus, which may help slow production growth and boost demand, potentially alleviating the expected supply surplus by 2026 [1] Group 1: Current Market Conditions - As of December 12, the active oil rig count in the U.S. has decreased by approximately 14% compared to the same period last year, indicating a potential reduction in supply [1] - The WTI crude oil contract for January delivery closed at $55.27 per barrel, while the Brent crude contract for February delivery closed at $58.92 per barrel, marking the lowest levels since February 2021 [2] - The decline in oil prices this year is primarily attributed to a supply surplus combined with weak market sentiment, exacerbated by OPEC+ policies [2] Group 2: OPEC+ Influence - OPEC+ has accelerated the increase of production quotas earlier and faster than expected, contributing to the oversupply in the market and driving down oil prices [4] - Non-OPEC supply, particularly from the U.S., has remained strong due to improved efficiency among shale oil producers, further expanding the supply surplus [4] - OPEC+ aims to prevent further loss of market share and address the issue of excess idle capacity, which is projected to be 4.6 million barrels per day in 2024, more than double the 2.3 million barrels per day in 2023 [4] Group 3: Future Outlook - The expectation of continued global supply surplus is putting pressure on oil prices, with the International Energy Agency (IEA) predicting a surplus of approximately 2.3 million barrels per day this year, increasing to 3.8 million barrels per day by 2026 [7] - The initial phase of oil trading in 2026 is expected to be dominated by rising inventories, which will continue to exert pressure on prices in the short term [8] - The market may face challenges in achieving supply-demand balance, with potential for significant price volatility, contingent on meaningful changes in supply, demand, or policy [8]

VCG/VCG via Getty Images Trafigura thinks the oil market could see a "super glut" of crude next year. The commodities firm pointed to new supply hitting the market while demand remains lackluster. Oil prices have already stumbled in 2025 amid waning global demand and increased output. The long-predicted "super glut" of oil is expected to hit energy markets in 2026. Trafigura, one of the world's biggest commodities trading firms, said it believes the oil market will see a flood of new supply at a t ...

Group 1 - The oil markets have experienced significant volatility due to concerns over a potential supply glut and uncertainties regarding sanctions on Russian producers [1]

The United States is on track to break yet another oil production record this year, but the Energy Information Administration (EIA) says the resulting supply glut could drag prices lower in the months ahead. In its October outlook, the EIA raised its forecast for U.S. crude production to 13.53 million barrels per day (bpd) for 2025, up from a forecast of 13.44 million bpd previously. That’s well above last year’s record 13.23 million bpd and reflects stronger-than-expected output in July, along with faste ...