Even though oil prices have climbed more than 1% on Monday after OPEC+ agreed to only a modest increase in production for November, the underlying market surplus is likely to subdue any upside momentum in crude.
On Sunday, the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers announced a modest increase in oil production, raising output by 137,000 barrels per day (bpd) for November.
This is the same monthly increase as in October, and it comes amid ongoing concerns about an impending oversupply in the market.
Prior to the meeting, sources indicated that Russia supported the 137,000 bpd increase to prevent downward pressure on prices.
However, Saudi Arabia reportedly favored a much larger increase—double, triple, or even quadruple that figure—in an effort to more quickly regain market share.
Rystad Energy forecasts a significant downside skew in price dynamics under these conditions.
Unless OPEC+ alters its strategy or sanctions severely restrict oil exports from Russia and Iran, ICE Brent is unlikely to sustain prices above $60-$65 per barrel in 2026, it said.
Market flip
“The market has flipped from tight to tepid, with further production increases from OPEC+ testing price support,” Susan Bell, senior vice president, commodity markets, oil, at Rystad Energy, said in an emailed commentary.
Supply is only moving in one direction, and with demand weakening, the remainder of 2025 will be a one-two punch for crude prices.
In the fourth quarter of 2025, crude oil supply is expected to exceed demand by over 2.5 million bpd, with total liquids showing a surplus of approximately 2.2 million bpd, Rystad estimated.
This surplus will reduce the market’s vulnerability to supply disruptions.
This shift is primarily driven by OPEC+ increasing production by roughly 1 million bpd quarter-over-quarter, alongside a modest growth of around 120,000 bpd in US supply, despite indications of a plateau in shale output, the Norway-based energy intelligence agency added.
Non-OPEC+ supply growth is projected to increase by almost 450,000 bpd, with significant contributions from Guyana, Argentina, and Canada. Conversely, global oil demand is expected to decrease by 230,000 bpd quarter-over-quarter in the last quarter of 2025.
This decline is primarily due to a seasonal reduction in transport fuel consumption within OECD markets.
Increased crude oil inventories are anticipated in the coming months due to a projected surplus in global supply over demand.
The key turning point has been the steady unwinding of OPEC+ production cuts, which are set to add close to 2.5 million barrels per day of supply in the second half of 2025, combined with continued resilience in non-OPEC+ growth,” Bell added.
2026 oil market outlook: oversupply persists
The oil market in 2026 is expected to remain oversupplied.
This is largely due to an anticipated annual liquids supply growth of approximately 2.5 million bpd.
This growth will be primarily driven by the return of OPEC+ barrels to the market, alongside consistent production increases from Brazil, Canada, and Guyana.
In contrast, demand growth is projected to stay below 1 million bpd. This subdued demand reflects weaker macroeconomic conditions in OECD nations and a plateauing of the post-pandemic recovery in air travel.
“This implies a global surplus of over 2 million bpd for the year, more concentrated in the first half,” Rystad Energy said.
David Morrison, senior market analyst at Trade Nation said:
Global demand growth is uncertain, given the increased use of alternatives, and as global economic growth remains fairly anaemic.
Price risks
If current inventory trends persist into the first half of 2026, oil prices could fall to $50 per barrel or even lower, indicating a shift in downside risk, Rystad said.
West Texas Intermediate is susceptible to falling below $50 due to persistent domestic production and potential inventory increases at Cushing, which are creating additional challenges, according to the agency.
The commissioning of Canada’s Trans Mountain pipeline in 2024 is expected to tighten the US midcontinent crude oil balance. This could, in turn, support WTI differentials relative to ICE Brent.
Approximately 0.5 million barrels per day (bpd) of Canadian exports have been redirected to other regions, forcing the U.S. Midcontinent to seek domestic supplies.
Rystad Energy’s Bell noted:
The implications extend well beyond the remainder of this year, with 2026 set to inherit both higher stock levels and looser fundamentals, placing sustained pressure on crude prices.
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