Oil to end 2025 with sharp losses

Oil prices were little changed on Wednesday but were set to post losses of more than 15 per cent in 2025, as global supply outpaced demand despite a year marked by wars, sanctions, and OPEC+ output moves.

Brent crude futures were down 5 cents at $61.28 a barrel at 0737 GMT, putting the benchmark on track for an almost 18 per cent annual decline, its steepest since 2020 and a third straight yearly loss. US West Texas Intermediate (WTI) slipped 3 cents to $57.92 and was headed for a 19 per cent drop, with average prices for both benchmarks the lowest since 2020, according to LSEG data.

Analysts said prices cooled after an early-year surge driven by tighter sanctions on Russia and heightened geopolitical risks, including disruptions linked to the Ukraine war and tensions in the Middle East. Sentiment later weakened as OPEC+ accelerated output increases and concerns grew over the impact of US tariffs on global growth and fuel demand.

BNP Paribas expects Brent to fall to around $55 a barrel in the first quarter of 2026 before recovering to about $60 later in the year, citing resilient US shale supply and flat demand. Market sources also reported a rise in U.S. crude and fuel inventories last week, based on industry data.

OPEC+ has released about 2.9 million barrels per day into the market since April and paused further hikes for the first quarter of 2026. Most forecasters expect supply to exceed demand next year, with estimates ranging from about 2 million to nearly 4 million barrels per day, though some analysts said deeper price falls could prompt renewed output cuts.

Despite oversupply concerns, others said geopolitical risks could help limit losses, even as fundamentals point to a looser market heading into 2026.

Attribution: Reuters