Oil prices remain weak after weeks of selling pressure, with West Texas Intermediate (WTI) and Brent crude hovering near multi-month lows. Rising inventories, slowing global demand, and renewed OPEC+ supply growth continue to dominate sentiment. WTI trades near $58.00, while Brent sits around $62.00. Analysts caution that a return to $65.00 is possible only if demand recovers or political risks intensify enough to offset oversupply.

Key takeaways

• WTI near $58.00–$59.00 and Brent around $62.00, both sitting at five-month lows.
  
• India’s decision to stop Russian crude purchases and U.S. pressure on China may reduce flows marginally.
  
• U.K. sanctions on Lukoil, Rosneft, and 44 shadow tankers raise logistical risks for Russia’s exports.
  
• OPEC+ output is rising as members unwind cuts; U.S. shale continues record production near 21 million bpd.
  
• IEA projects a 3 million bpd surplus by 2026, the biggest glut since 2020.
  
• Key WTI levels: Support at $58.25, resistance around $65.61–$70.00.
  

Political pressure meets market inertia

Oil prices saw a mild uptick in early Asian trading following fresh geopolitical headlines. U.S. President Donald Trump said Indian Prime Minister Narendra Modi had pledged to stop buying Russian oil, with the U.S. set to pressure China next. These moves form part of Washington’s broader strategy to reduce Moscow’s energy revenues.

Meanwhile, the U.K. government announced new sanctions targeting Russia’s largest oil firms, Lukoil and Rosneft, along with 44 tankers accused of helping Moscow bypass Western restrictions. The measures include asset freezes, transport limits, and bans on financial services, increasing pressure on Russia’s oil logistics network.

However, the market response has been cautious. U.S. inventory data from the American Petroleum Institute showed a 7.36 million barrel build, while gasoline stocks rose 2.99 million barrels. These figures confirm that despite political tension, global crude supply remains abundant.

OPEC+ production increases are overwhelming the market

The International Energy Agency (IEA) revised global supply forecasts higher for both 2025 and 2026, underscoring faster OPEC+ unwinding and strong non-OPEC growth.

The IEA now projects supply growth of 3 million barrels per day (bpd) in 2025 and 2.4 million bpd in 2026 - with output led by Saudi Arabia, Iraq, and the UAE on the OPEC side, and the U.S., Brazil, Canada, and Guyana outside the bloc.

The United States continues to set new records, producing around 13.58 million bpd using roughly half the fracking crews it did three years ago. Improved efficiency, automation, and the use of DUCs (drilled-but-uncompleted wells) have allowed producers to boost volumes with minimal cost increases.

As a result, global oil inventories reached 7.9 billion barrels in August - a four-year high - while “oil on water,” or crude in transit, surged by 102 million barrels in September. These figures illustrate the structural oversupply that continues to weigh on prices.

The IEA says global oil demand growth is slowing

Demand growth is losing momentum. The IEA expects consumption to rise by just 680,000 bpd in 2025 and 700,000 bpd in 2026, down from previous forecasts. That’s less than half the pace projected by OPEC, which remains more bullish on emerging-market demand.

Economic headwinds are widespread: consumer confidence remains fragile in developed economies, inflation continues to pinch household spending, and industrial production is slowing. In China, deflationary pressure and a prolonged property market slump have cut fuel demand, while renewed U.S.–China trade tensions - including tariff hikes and port restrictions - threaten freight and manufacturing output.

The IEA’s caution contrasts with OPEC’s optimism. The agency assumes renewable energy growth and efficiency gains will curb demand, warning that the market could remain oversupplied through 2026 without stronger consumption.

OPEC oil production forecast: The 2026 glut warning

The IEA’s October Oil Market Report warns that by 2026, global oil supply could outpace demand by nearly 3 million bpd — an imbalance larger than the 2020 pandemic-era glut. The surplus is driven by rapid OPEC+ expansion, steady non-OPEC production, and sluggish demand recovery.

Brent’s recent slide below $66.00 and WTI’s drop to $58.00 reflect concerns that refining capacity may not keep up with the flood of crude. Refineries are processing roughly 85.6 million bpd, a record high, but analysts say this level isn’t sustainable if storage levels keep rising. Should the imbalance persist, Brent could test $50–$55, while WTI may find support near $55–$60.

Geopolitical factors could slow the fall

Despite weak fundamentals, geopolitics remain the key wild card. Sanctions on Russia and Iran continue to limit output, while China’s energy stockpiling provides occasional relief to oversupplied markets.

The U.S. administration’s diplomatic push to pressure Asian economies - particularly India, China, and Japan - to reduce Russian imports could gradually alter trade flows if commitments are enforced. Even so, markets remain sceptical until such cuts appear in official data.

Bank of America expects short-term volatility around these developments but maintains a base case for Brent at sub $50 if Chinese demand continues to soften or if Washington escalates its tariffs on Beijing.

Oil price technical analysis

From a technical perspective, WTI is hovering near key support at $58.25. A sustained drop below this level could open a move toward $55.00–$57.00, while a rebound could target resistance at $65.61 and $70.00.

Bollinger Bands show prices trading near the lower boundary, suggesting oversold conditions. Meanwhile, the RSI is turning upward from the mid-30s, hinting at a potential short-term recovery - but broader momentum remains bearish unless prices close above $65.00.

Trading oil price volatility with Deriv

Oil price fluctuations can present strategic opportunities for traders looking to benefit from short-term movements or hedge exposure. On Deriv MT5, you can trade WTI and Brent CFDs with access to detailed charting tools, real-time price feeds, and integrated indicators that help you track key support and resistance levels.

When volatility spikes - for example, during OPEC+ meetings or U.S. inventory announcements - traders can use stop-loss and take-profit features on Deriv MT5 to manage risk. For trade planning, Deriv’s trading calculator lets you calculate margin, pip value, and potential profit/loss before entering a position.

Investment implications

The medium-term setup for oil remains bearish, with oversupply likely to dominate unless demand surprises to the upside. Traders may find tactical buying opportunities near $61.00–$62.00 support if political headlines trigger brief rallies, but gains are expected to stall below $70.00–$75.00.

Low-cost producers and efficient shale operators remain best positioned to weather prolonged price weakness, while high-cost offshore projects could see pressure on margins. Refining companies, however, may benefit from cheaper crude and resilient processing margins.

Deriv MT5 users can follow live market trends and use built-in analytical tools to adapt strategies as oil volatility persists through 2025–2026.

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