Oil Prices Slide as Oversupply Fears Tighten Their Grip on Markets

Crude oil prices were down today, set for the second consecutive weekly loss as glut perceptions deepen amid reports of rising oil inventories.

At the time of writing, Brent crude was trading at $59.71 per barrel while West Texas Intermediate was changing hands for $55.99 per barrel, both down by around $2 since the start of the week. Brent briefly slid below $59 earlier in the week.

All the major oil market forecasters expect an oversupplied world in 2026 and consequently predict even lower oil prices, with some seeing Brent crude slipping closer to $50 per barrel. Reuters’s Ron Bousso earlier today cited Kpler figures suggesting the amount of crude oil on water had reached 1.3 billion. This would be the largest amount of crude on water since March 2020, Bousso noted.

Meanwhile, the volume of oil stored on tankers is also climbing. Per Kpler, the amount of crude oil in floating storage for at least 20 days had reached 51 million barrels, deepening oversupply concerns among traders.

Some counter-pressure on prices came earlier in the week amid reports that President Trump was tightening the “tanker blockade” noose around Venezuela, which was already disrupting the flow of crude from the country to buyers, and that the UK was also stepping up the pressure on Russia by imposing sanctions on three smaller oil producers. Tatneft, Russneft, and NNK were sanctioned for “obtaining a benefit from or supporting the government of Russia”. The sanctions come as flows from the two largest exporters of crude from Russia see declines in flows but smaller exporters ramp up shipments abroad.

Yet the effect of the bullish news was short-lived, the oversupply fears dominating market sentiment. A new peak oil demand forecast from China’s CNPC reinforced this, with the energy major predicting that the world’s largest importer would see its demand for oil peak by 2030.

By Irina Slav for Oilprice.com

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