Bearish sentiment dominates early 2026
Crude oil markets are starting 2026 on a cautious note, with Brent crude trading at $60.77 per barrel and WTI at $57.33. The slightly bearish market sentiment reflects growing concerns about global oversupply that could pressure prices throughout the year.
The International Energy Agency estimates that oil output could exceed consumption by around 3.8 million barrels per day in 2026, creating what analysts describe as one of the most significant supply gluts in recent years.
OPEC+ Strategy under scrutiny
In response to softening prices, OPEC+ announced last month it would pause further production increases during the first quarter of 2026. The cartel, led by Saudi Arabia and Russia, is expected to hold a video conference in early January to assess market conditions.
Despite the pause, OPEC+ is still expected to pursue the reversal of remaining voluntary production cuts later in the year. According to Commerzbank analysts, this could bring an additional 1 million barrels per day to the market.
Price forecasts remain subdued
Major financial institutions have issued conservative price outlooks:
- EIA: Forecasts Brent crude at an average of $55 per barrel in Q1 2026
- J.P. Morgan: Projects Brent at $58/bbl for full year 2026
- Goldman Sachs: Maintains a range-bound view of $60-70/bbl with downside risk
Potential demand catalysts
Not all news is bearish. China announced plans to expand fiscal spending in 2026, which could boost oil consumption in the world's largest crude importer. Additionally, progress in Ukraine-Russia peace negotiations could eventually lead to eased sanctions and normalized trade flows.
What to watch
Key factors that could influence oil prices in the coming weeks:
- OPEC+ January meeting decisions
- Chinese economic stimulus implementation
- US inventory data from EIA
- Geopolitical developments in the Middle East
Traders and investors should monitor these developments closely as the market navigates between oversupply concerns and potential demand surprises.