Oil Struggles for Direction as Surplus Builds
Oil traded sideways Friday, holding just above the weakest levels since October as the market confronts an uncomfortable reality: the world is awash in crude again.
West Texas Intermediate hovered above $57 a barrel, while Brent stayed just over $61, with both benchmarks trending toward the lower end of their trading band. Diesel futures underperformed, and broader pressure from falling U.S. equities added to the risk-off mood.
The International Energy Agency reinforced the market’s caution, warning of an unprecedented surplus and noting that global inventories have risen to a four-year high — a clear signal that supply continues to outpace demand.
This oversupply backdrop has steadily pushed Brent closer to the key $60 level, a price floor the market hasn’t broken since May.
Geopolitics Are the Only Support Right Now
While fundamentals lean bearish, geopolitics are offering limited support.
- The U.S. announced new sanctions on Venezuelan-linked individuals and tankers, part of a broader push to restrict the Maduro regime’s access to oil revenue.
- A murky path toward a Russia–Ukraine peace deal continues to influence sentiment. Any resolution that lifts sanctions on Russian crude could add fresh barrels to the market — but ongoing attacks on Russian energy infrastructure have kept a psychological floor under prices.
As Dennis Kissler of BOK Financial notes, Ukraine’s continued targeting of Russian oil assets — even amid negotiations — has prevented crude from breaking lower.
WSA Take
Oil is stuck between heavy supply and uncertain geopolitical risk, with neither side strong enough to trigger a major breakout. Until inventories tighten or demand signals improve, crude is likely to remain range-bound. For energy investors, the real catalyst will be the pace of global economic stabilization — and whether OPEC+ shows discipline heading into 2026.
Read our recent coverage on U.S. Home Prices Turning Negative.
Explore more market insights on the WallStreetAccess homepage.
Disclaimer
WallStAccess does not work with or receive compensation from any companies mentioned. This content is for informational and educational purposes only and should not be considered financial advice. Always conduct independent research before investing.
