Oil prices fell nearly 2% on Thursday, extending a December slide that has persisted despite a string of supportive signals. Brent dropped toward $61 as bearish sentiment continued to outweigh improving fundamentals.
OPEC’s December report maintained a strong demand outlook for 2025–26, highlighting robust consumption in Asia and the Middle East and noting that non-OPEC supply growth is expected to slow after 2025. The group also emphasized that OPEC+ production management remains a stabilizing force—offering a more optimistic view than the IEA’s earlier glut warnings.
The IEA, however, also shifted its tone. In its latest update, it trimmed its projected 2026 surplus for the first time in months—from 4.09 million bpd to 3.84 million bpd—citing sanctions-driven supply constraints and firmer global demand. It also nudged its 2026 demand-growth forecast higher.
U.S. data was similarly supportive, with API showing a 4.8-million-barrel crude draw and the EIA confirming a 1.8-million-barrel decline, reflecting steady winter demand.
Geopolitics added further upside risk after Ukraine said its drones hit Russian oil assets in the Caspian Sea for the first time, expanding the conflict’s energy-related targets.
Even so, futures weakened, driven largely by thin liquidity, algorithmic selling, and fund de-risking as year-end approaches.
