WTI Crude Struggles as Global Supply Surplus Fears Intensify

Supply Glut and OPEC Shift

J.P. Morgan Research has lowered its oil price projections, noting that the global market is severely oversupplied. A key bearish factor is the apparent shift in OPEC's strategy; rather than cutting further to maintain high prices, several members are ramping up production to maximize revenue. Analysts point to the UAE, Iraq, and Kuwait as primary drivers of this incremental supply increase, which is expected to total over 800,000 barrels per day in new capacity by 2026.

The Trump Put and Energy Policy

The U.S. administration has made reducing crude prices a top priority to manage inflation, with reports suggesting a target price of $50 per barrel. J.P. Morgan's Natasha Kaneva notes that while the administration might intervene if prices fall below $50—where shale production becomes uneconomical—they are unlikely to stabilize the market before then. This 'Trump Put' is currently keeping a lid on any potential price rallies in the WTI benchmark.