Core Insights - Key crude prices in the Middle East have reached their lowest level against the Brent benchmark in two months, indicating an oversupplied market due to rising output from both regions amid weak demand [1][2] - Saudi Arabia has reduced its crude prices for Asia to the lowest premium in five years, aiming to maintain market share as OPEC+ increases output [3] - Investment banks predict Brent prices will average below $60 per barrel next year, with WTI prices expected to be even lower, due to anticipated oversupply [4] Group 1: Market Conditions - The premium of Abu Dhabi's Murban grade over Brent has narrowed to its lowest level since early October, reflecting increased supply [1] - The discount of Dubai's benchmark against Brent has widened to its largest in seven weeks, indicating ample global supply [2] Group 2: Saudi Arabia's Strategy - Saudi Arabia's price cut for crude bound for Asia was anticipated due to the plentiful supply and OPEC+'s decision to raise output [3] - The price reduction is part of Saudi Arabia's strategy to preserve its market share in a competitive environment [3] Group 3: Future Price Expectations - Most investment banks expect Brent prices to remain below $60 per barrel next year, with a growing surplus in the oil market anticipated for 2026 [4] - Non-OPEC supply is also projected to increase significantly despite current price weaknesses [4]