- Oil prices near $56 for WTI and below $60 for Brent amid oversupply concerns
- WTI down over 2% for the week, heading for a second weekly decline
- OPEC+ and other producers increased output, causing a supply glut in 2023
Oil headed for a second weekly decline as concerns over a growing glut outweighed potential supply disruptions.
West Texas Intermediate traded near $56 a barrel, and was down more than 2% for the week, while Brent closed below $60 on Thursday. Virtually all of the world's biggest traders see the market in a state of oversupply early next year, with industry heavyweight Trafigura forecasting Brent will be in the $50s through the middle of 2026.
Oil has lost about a fifth this year as OPEC+ returned barrels faster than anticipated and producers elsewhere also pumped more, while demand was lackluster. Geopolitical risks, especially around Russian and Venezuelan supply, have helped temper some of the declines.
"The dominant sentiment right now is definitely a structural surplus," said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. "That glut mindset is outweighing geopolitical flare-ups from Russia to Venezuela."
The UK imposed sanctions on three smaller Russian oil producers on Thursday, as a US-brokered peace deal between Moscow and Kyiv remains elusive.
Prices
WTI for January delivery slipped 0.3% to $56.01 a barrel at 8:21 a.m. in Singapore.
The contract expires on Friday. More active February futures dipped 0.4% to $55.80.
Brent for February settlement gained 0.2% to close at $59.82 on Thursday.
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