WNAM REPORT: Crude oil prices are facing mounting pressure amid growing expectations of a global supply surplus, with Goldman Sachs analysts forecasting that Brent crude could fall to the low $50s per barrel in 2026 — a sharp drop from its current levels.
The investment bank’s commodity strategists, in a note to clients cited by Reuters, projected a significant oversupply in global oil markets, with an estimated 1.8 million barrels per day (bpd) surplus by late 2025. The surplus could begin swelling as early as this year, aligning with the International Energy Agency’s (IEA) recent forecast of a 1.4 million bpd glut in 2025. The IEA expects supply to grow by 2.1 million bpd, while demand lags behind at only 700,000 bpd.
Currently, Brent crude is trading at $67.32 per barrel, and West Texas Intermediate (WTI) is at $63.32, according to real-time data from Oil Price. While both benchmarks have seen slight gains this week, the broader market remains clouded by uncertainty and downward pressure.
Adding to the bearish sentiment, hedge funds and speculators have slashed their long positions in Brent and WTI to the lowest levels in 16 years, Bloomberg reported. This retreat reflects declining concerns over further U.S. sanctions on Russian oil and fading hopes for a peace resolution in the Ukraine conflict, which had previously supported prices.
However, the path ahead isn’t entirely one-directional. Fresh U.S. tariffs on Indian goods are set to take effect today. If these tariffs disrupt India’s imports of discounted Russian crude, the expected surplus may have less impact on global prices than anticipated.
China’s oil demand — a major driver of global consumption — is also showing signs of recovery on a month-on-month basis. While annual demand remains lower, imports are rising, giving oil bulls some hope of resilience in global demand.
Further, Energy Intelligence added to the growing consensus of oversupply, predicting a surplus of 800,000 bpd for the current year — though less than Goldman’s projection.
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Price Overview
• Brent Crude (current): $67.32/barrel
• WTI (current): $63.32/barrel
• Goldman Sachs Forecast (2026): Low $50s/barrel
• Recent Highs: Prices have remained well below post-COVID peaks of over $120/barrel seen in mid-2022
• 16-Year Speculation Low: Hedge fund bullish bets at lowest since 2009
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With global supply set to outpace demand, and investor sentiment softening, crude oil markets appear headed into a turbulent phase. Still, geopolitical triggers and import patterns, particularly from Asia, could yet shift the direction of oil prices in unexpected ways.
