Stability of Oil Prices After the Largest Drop

SadaNews - Oil prices stabilized after the largest drop in nearly three weeks, while traders await reports issued this week to assess the supply situation.

Brent crude was traded above $62 a barrel after a 2% drop on Monday, while West Texas Intermediate crude stabilized near $59.

The U.S. Energy Information Administration is set to release its short-term energy forecasts on Tuesday, and the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) will issue reports later this week.

The International Energy Agency anticipates a record surplus next year, and traders will be watching for any adjustments to market forecasts. Crude has been trading in a narrow range not exceeding $4 since the beginning of November, while investors balance the effects of sanctions on Russia with the likelihood of reduced exports.

Predictions of an Increasing Surplus in the Market

Warren Patterson, head of commodity strategy at ING Group, said that "the surplus in the oil market will continue to grow in 2026," with expectations that supply will exceed demand by more than two million barrels per day.

He added: "We expect the average price of Brent to reach $57 a barrel for the year, assuming that the flow of Russian oil remains uninterrupted despite U.S. sanctions."

India, the largest buyer of seaborne Russian crude, is heading to reduce its purchases, and this move is likely to be a key focus in trade talks with the United States this week. Russian President Vladimir Putin visited India last week, indicating improved relations between the two sides.

In another context, ongoing Ukrainian attacks on energy infrastructure in Russia threaten to disrupt crude production and exports to global markets. The main export port of the "Caspian Pipeline Consortium" in the Black Sea has experienced disruptions, with reduced export capacity also impacting shipments coming from Kazakhstan.