Crude Markets Turn Bearish Ahead of 2026 Forecasts
Crude oil prices moved into the red on Tuesday, November 24, as traders weighed Russia-related uncertainty against growing expectations of a 2026 supply surplus. After Monday’s gains, the market slowed, reflecting a shift in focus from geopolitical tensions to the broader supply outlook for next year.
Brent crude slipped to $63.20 a barrel, and West Texas Intermediate (WTI) edged down to $58.71, underscoring a market influenced as much by negotiations around Russian exports as by forecasts showing supply could outpace demand in the coming year.
Even so, the prospect of a U.S. interest rate cut on December 9 – 10, Federal Reserve meeting offered some underlying support, with policymakers signalling openness to easing that could strengthen economic activity and oil consumption.
Why Are Prices Pressured?
Brent and West Texas Intermediate (WTI) had each gained 1.3% in the previous session as renewed doubts over a Russia-Ukraine peace agreement prompted traders to rethink the outlook for Russian crude supplies. With Western sanctions still in place and no decisive progress in negotiations, markets remained cautious about the stability of Russian export flows.
However, analysts note that despite concerns over restricted Russian shipments, the broader supply backdrop is turning decisively bearish. Deutsche Bank wrote that the market may face a surplus of at least 2 million barrels per day in 2026. Analyst Michael Hsueh said, “The path forward into 2026 remains a bearish one”, highlighting the lack of a clear route back to deficits even by 2027.
These expectations are weighing more heavily on trader sentiment than the ongoing diplomatic uncertainty. A potential peace deal could lift sanctions and bring Russian supply back into the market, but negotiations remain inconclusive. Kyiv and European allies viewed parts of the U.S. proposal as resembling “a Kremlin wish list,” which has reduced optimism for a quick breakthrough.
Is Oversupply Becoming the Central Story?
Forecasts from major financial institutions have increasingly emphasised the scale of upcoming supply additions. JPMorgan said Brent could fall into the $30 range by 2027 without coordinated production cuts, citing a significant market imbalance. The bank projected Brent to average $57 in 2027 but warned that, without intervention, rising surpluses could push the average down to $42, with prices falling into the $30s by the end of the year.
The firm estimates the market will need around 2 million barrels per day of cuts starting in June 2026 to stabilise. Analysts added, “We expect the market will find equilibrium through a combination of rising demand driven by lower prices and a mix of voluntary and involuntary production cuts.”
Goldman Sachs expressed a similar view. The bank expects WTI crude to average $53 per barrel in 2026 amid a 2 million barrels per day surplus. Daan Struyven, co-head of global commodities research, said that investors should short oil in the near term, describing 2026 as the last year of the current major supply wave. Goldman also expects the oil market to begin rebalancing only in 2027.
These outlooks align with broader year-to-date trends. Brent crude prices have fallen by 14%, stabilising near $62.59 as markets await further clarity on peace talks and policy decisions. Oversupply remains the dominant driver, even as geopolitical developments continue to generate short-term volatility.
How Are Markets Reacting Day to Day?
Intraday moves have mirrored the tug-of-war between supply expectations and geopolitical headlines. Crude futures rose 1.3% in a recent session as equities rallied and progress in peace discussions kept the war-risk premium subdued. WTI settled at $58.84, with Mizuho’s Robert Yawger saying the benchmark “needs to scrape its way back to levels above 60 before worrying about technical resistance levels above.”
Other sessions saw downward pressure. Dennis Kissler of BOK Financial wrote that “if a peace deal is reached, it is assumed most sanctions on Russia would be lifted,” which weighed on pricing sentiment. He added that Russian exports had already begun shifting, with some buyers turning away while China increased purchases of Middle Eastern crude.
Early U.S. trading on several days reflected mixed sentiment. Ritterbusch and Associates wrote that crude continues to act as a “fulcrum” with diesel providing leadership on both sides of the market. WTI and Brent frequently traded within narrow ranges, suggesting that traders are closely watching both peace negotiations and supply developments.
Where Does the Market Stand Now?
Crude markets remain tilted toward a bearish outlook, with forecasts showing a surplus extending into 2026. Traders remain focused on Russia-Ukraine talks, sanction risks, and signals from the U.S. Federal Reserve. However, major forecasts still point to supply running ahead of demand until at least next year.
With mixed signals on diplomacy and policy, traders are watching whether anything in the coming months can shift the market’s direction. The open question now is: can any catalyst break the bearish trend?
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