International crude oil prices continued to face significant downward pressure during Friday’s Asian trading session, with U.S. crude edging up slightly to trade near $58.50 per barrel. Despite this modest rebound, the broader trend since the start of the year has been marked by volatility and a clear decline. Multiple market institutions attribute this persistent weakness primarily to sluggish global economic recovery, which has led to softening industrial activity and reduced demand for transportation fuels. As a result, long-term pressure from the demand side remains firmly in place.
On the supply side, the situation has been further complicated by an increase in production from non-OPEC oil-producing countries. New projects have been launched in quick succession, adding to an already oversupplied market. Expectations for oversupply have grown stronger as geopolitical tensions—particularly those related to Russia and Ukraine—show signs of easing. This has pushed international oil prices down to their lowest levels since February 2021, with a cumulative annual decline of around 20%, signaling a notable cooling of risk appetite among market participants.
Industry Analysis Points to Structural Surplus and Prolonged Downturn
Major commodity trading firms such as Trafigura Group have highlighted the coexistence of rapid supply growth with slowing global demand. This dynamic is expected to create a ‘super surplus’ in the oil market next year. Trafigura’s latest earnings report reflects this trend, with net profits for the fiscal year ending in September dropping to $2.7 billion—the lowest figure seen in nearly five years—underscoring the mounting profitability challenges across the industry.
Looking ahead, several large-scale crude oil development projects are scheduled to come online next year, which will likely intensify supply pressures further. With demand growth remaining weak, analysts generally agree that reversing this upward supply trend will be difficult, predicting that a significant structural surplus could persist until at least 2026.
The U.S. Energy Information Administration and leading Wall Street banks share a bearish outlook on oil prices, forecasting that the average international price may fall below $60 per barrel over the next year. Institutions such as Goldman Sachs note that while estimates of surplus vary, most experts expect 2026 to represent the trough of this supply-driven cycle.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, predicts that before October 2026, the crude oil futures curve will likely remain relatively flat, indicating consensus on medium-term slackness between supply and demand. Analysts at ING Groep anticipate that oversupply may peak in the first quarter of 2026 but warn that surpluses are expected throughout every quarter that year. As a result, global inventories will continue to accumulate, exerting systematic downward pressure on prices.
Technical Indicators Reflect Persistent Bearish Momentum
From a technical standpoint, U.S. crude oil continues to display clear signs of a downtrend on daily charts. Prices remain below medium- and long-term moving averages, with short-term averages arranged in a bearish pattern that consistently weighs on oil values. Following a break below the critical psychological level of $60 per barrel, WTI crude has struggled to regain lost ground—a sign of limited buying support at lower price levels.
Technical indicators reinforce this outlook: The daily RSI has remained below 40 for an extended period without reaching extremely oversold territory but still signals weak market momentum. The MACD indicator is also entrenched below its zero line, with expanding green bars pointing to an absence of any meaningful reversal signal in the prevailing bearish trend.
In summary, until WTI crude oil can establish stable support within the $60-62 range, price movement is expected to stay subdued and volatile. Any rebounds are likely to be technical recoveries rather than true trend reversals.
Long-Term Prospects Shaped by Shifting Energy Demand and Geopolitical Risks
Recent revisions by the International Energy Agency (IEA) shed light on evolving long-term energy demand trends. In its September report, the IEA highlighted how advancements in artificial intelligence and expanding data center infrastructure are driving up electricity consumption in developed economies—a factor expected to boost global energy usage overall. The agency projects that worldwide oil demand could reach as high as 113 million barrels per day by 2050.
At the same time, geopolitical tensions related to energy independence and critical mineral resources remain unresolved. Recent escalations between the United States and Nigeria have drawn attention to vulnerabilities in energy and rare metal supply chains. These developments have already impacted Nigerian financial assets: Sovereign bond prices and local currency exchange rates have weakened simultaneously, illustrating how geopolitical risks can influence both energy markets and capital flows.
Currently, international oil prices are locked in a downward cycle characterized by weak demand, expanding supply, and rising inventories—a combination that makes it difficult to alleviate oversupply pressures quickly. From both fundamental and technical perspectives, U.S. crude oil shows no clear signs of trend reversal; rather, all indicators point toward ongoing suppression.
Looking ahead, analysts warn that severe price volatility could occur if demand recovers more quickly than expected amid ongoing energy transitions and insufficient investment in traditional energy sources over the medium-to-long term. For now, low oil prices appear not as an endpoint but as an interim phase preceding potential new cycles of change.
