WTI Oil Stabilizes Near $58 Amidst Fears of Looming Supply Glut

Surplus Warnings

The International Energy Agency (IEA) has reaffirmed its forecast for a record supply glut in the coming year. Rising production from the Americas—specifically the US, Brazil, and Guyana—is expected to outpace global demand growth. This structural oversupply is the primary weight on prices, preventing any sustained rally despite ongoing geopolitical risks.

Geopolitical Noise

While fundamentals are bearish, geopolitics continues to provide a floor. Recent incidents involving tanker interceptions and sanctions on Venezuelan exports have kept traders on edge. However, without a major disruption to actual physical flows, these events are currently only causing short-lived price spikes rather than trend reversals.

Inventory Builds

Weekly data shows that US crude inventories are comfortable, further validating the surplus narrative. Refineries are running at high rates, but crude stocks are not drawing down as quickly as bulls would hope. The market is now looking for signals from OPEC+ on whether they will extend cuts deeper into 2026 to balance the market.