Oil prices held modest gains on Wednesday as Brent crude traded near $63 per barrel and West Texas Intermediate hovered around $59, even as Wall Street banks and commodity executives warned that a historic supply glut could push global benchmarks into the $30s. The outlook comes as OPEC+, the U.S., Russia, Venezuela, and China dominate investor focus, creating uncertainty in energy markets already bracing for what analysts say could be years of oversupply.
Prices rose 0.4% in the previous session, but both Brent and WTI remain on track for annual losses as OPEC+ gradually restores output in a sluggish demand environment. JP Morgan issued one of its starkest assessments yet, warning that Brent could slide into the low $50s per barrel by late 2026-and potentially end that year in the $40s-if OPEC fails to intervene.
The bank's forecast turns more bearish into 2027, projecting Brent could average $42 per barrel that year and fall into the $30s by year-end. At the Financial Times Commodities Asia Summit in Singapore, Saad Rahim, Chief Economist at Trafigura Group, said: "No matter how much demand is going to come in, you just have a lot of supply. The path of least resistance for prices is likely down."
A drop into the $30-$35 range would deliver a substantial consumer windfall. Analysts estimate roughly 67% of pump prices are linked directly to crude costs, and a fall into the $30s could reduce retail petrol prices by 25-40%. Goldman Sachs forecasts WTI at $53 per barrel in 2026, while the U.S. Energy Information Administration expects average U.S. petrol prices to fall below $3 per gallon that same year. This week's national U.S. average is already at $2.999, according to AAA.
OPEC+ policy remains a key variable. The group raised December output targets by 137,000 barrels per day but simultaneously announced a pause on new supply increases for January through March 2026. Since April, the alliance has unwound roughly 2.9 million barrels per day of voluntary cuts-equal to about 2.7% of global supply-despite muted consumption, according to Rystad Energy.
Geopolitical risks continue to cloud the market as tensions escalate between the U.S. and Venezuela, which holds an estimated 303 billion barrels of proven oil reserves. "The Venezuela situation warrants caution," said Gao Jian, an analyst at Qisheng Futures Co. "However, supply fundamentals continue to exert bearish pressure on crude oil."
Investors are also weighing the uncertain state of Ukraine ceasefire negotiations. Talks between U.S. and Russian officials remain ongoing but have produced no clarity on whether the conflict may ease in ways that meaningfully influence global energy flows.
Demand data has softened across multiple regions. Janet Hong, CEO of Hengli Petrochemical International, said Chinese consumption-one of the few bright spots earlier this year-is expected to remain subdued until at least mid-2026. U.S. crude inventories rose by 574,000 barrels last week, and petrol and diesel stockpiles also increased, reinforcing the view that supply continues to outpace demand.
