WTI Crude Under Pressure as Global Supply Surplus Forecasts Loom

Surplus and OPEC Strategy

J.P. Morgan and Goldman Sachs have both highlighted that the global oil market is likely to face an oversupply in 2026. The shift in OPEC's reaction function—away from cutting to defend a specific price and toward maintaining market share—is a significant bearish factor. Increasing supply from the UAE and Kazakhstan is expected to further weigh on prices throughout the next 18 months.

Inventory and US Policy

The US administration's preference for lower fuel prices to combat inflation remains a primary headwind for crude. While geopolitical incidents occasionally inject a risk premium, the fundamental lack of demand growth in major importing economies is preventing any sustained rally. Analysts expect WTI to struggle near the $50-$55 range unless a major supply disruption occurs.