Oil Market Finds Its Floor As Supply Risks Collide With Surplus Fears
Brent and WTI are trying to stage a fragile comeback after one of their toughest runs since 2023. In early Monday trading Brent sits just above 63 dollars a barrel and WTI near 59 dollars, modest gains after four straight down months and a year on year drop near twelve percent.
The immediate catalyst was the latest OPEC plus meeting, where producers chose to hold output steady into the first quarter of 2026 and keep more than three million barrels a day of cuts in place.
That stance reassured traders who had spent November fretting about a glut next year as record United States production near thirteen point eight million barrels a day floods the market.
Fresh geopolitical risks are also forcing shorts to reassess. A Ukrainian drone strike on infrastructure used by the Caspian Pipeline Consortium has disrupted shipments that handle a little over one percent of global supply.
At the same time Washington has warned airlines to treat Venezuelan airspace as effectively closed, a reminder that heavy crude from that country still depends on political goodwill that can vanish overnight.
Over the past week prices had drifted lower on talk of a future Russia Ukraine peace deal and on forecasts that Brent could average low sixties in 2026, with longer term projections for Brent around fifty seven and WTI near fifty three.
Middle Eastern benchmarks such as Murban and Oman now trade slightly above Brent, while Western Canada Select continues to sell at a double digit discount to WTI, another sign that barrels remain plentiful.
Yet screens are no longer one way. Exchange traded funds tied to crude have seen outflows as passive money steps aside, but short term charts now show momentum turning up.
On four hour time frames both Brent and WTI are pressing against their upper Bollinger bands with firm positive MACD readings and relative strength in the low sixties.
Daily indicators are neutral to improving and weekly charts still signal a broader downtrend, suggesting that today’s bounce is best read as a repricing of risk rather than the start of a new supercycle favouring leaner private producers over politicised state giants.
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