Oil Prices Slide Below $60 over Excess Supply Conditions
Oil prices declined below $60 per barrel on Wednesday over excess supply expectations. The market expects an oil glut to reduce prices of crude oil in 2026, and Goldman Sachs agrees to a price slump in its latest update.
The Organisation of Petroleum Exporting Countries and allies’ members’ (OPEC+) decision to maintain the status quo on output is also acting as support for a price drop amidst political conflict among top suppliers—Saudi Arabia and the United Arab Emirates.
In addition, crude oil prices slipped below the $60 mark in anticipation of Venezuelan supply to the global commodity market following the seizure of President Nicolas Maduro.
Goldman Sachs forecasts Brent/WTI to decline further to 2026 averages of $56/$52 as the last big supply wave leaves the market in a 2.0 mb/d oversupply.
Brent crude stood at $59.98 per barrel, down 0.6% from the previous close of $60.36. US benchmark West Texas Intermediate (WTI) fell 0.9% to $56.26 per barrel, compared with $56.78 in the prior session.
US President Donald Trump said Tuesday that interim authorities in Venezuela had agreed to transfer between 30 and 50 million barrels of sanctioned oil to the US to be sold at market price.
“I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 million barrels of high-quality, sanctioned oil to the United States of America,” Trump said in a statement via his social media company, Truth Social.
“This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” he added.
Experts say Trump’s remarks suggest a preference for boosting supply rather than tightening it, adding to existing concerns about oversupply in global oil markets.
On Tuesday, Fitch Ratings reported that the US actions in Venezuela have had a limited impact on North American oil producers.
“Recent U.S. involvement in Venezuela could ultimately support oil production growth in the country and benefit U.S. exploration and production (E&P) companies should they result in policy shifts that enable increased foreign participation in the sector,” the international credit rating agency said in a statement.
However, meaningful gains would likely require major investment and time, and investment incentives remain limited in a currently oversupplied global market, it said.
Meanwhile, the American Petroleum Institute said US commercial crude inventories fell by 2.8 million barrels last week, defying market expectations for a 1.2 million-barrel build.
The unexpected drawdown signalled resilient US demand and helped limit further price declines. Official inventory data from the US Energy Information Administration are due later Wednesday.Naira Rallies Ease Corporate Foreign Payments Burden
