Oil prices are sliding again, and they’re heading for a second straight weekly loss as worries about too much supply continue to outweigh fears of shortages.
Brent crude has dropped below $60 a barrel, down more than 2% this week. U.S. oil, known as West Texas Intermediate, is trading around $56 a barrel, according to market data.
The big issue right now is oversupply.
Most major oil traders believe the market will be flooded with oil early next year. Trafigura, one of the world’s largest commodity trading firms, says Brent crude could stay in the $50 range until mid-2026.
Oil prices are already feeling the pressure. So far this year, oil has lost about 20% of its value. One reason is that OPEC+ has ramped up production faster than expected. At the same time, other oil-producing countries are pumping more, while global demand remains weak.
That combination is hard to ignore.
Geopolitical tensions — especially involving Russia and Venezuela — have helped slow the price drop, but only slightly. Traders say those risks aren’t strong enough to overcome the bigger supply problem.
Harris Khurshid, chief investment officer at Carobar Capital in Chicago, summed it up clearly. He said the market mood right now is all about structural oversupply, and that view is beating out concerns about global conflicts.
Trading activity is also slowing as the Christmas and New Year holidays get closer. With fewer traders active, prices can move more sharply than usual. On Friday, trading volume for Brent crude was below normal levels for that time of day.
Adding another layer of tension, the UK announced new sanctions on three small Russian oil companies on Thursday. This comes as efforts to broker a peace deal between Russia and Ukraine continue to stall.
For now, the message from the oil market is clear: supply is winning the battle — and prices are feeling it.
