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Informist, Wednesday, Nov. 12, 2025

MUMBAI – Crude oil prices are expected to fall further due to concerns of oversupply and weak oil demand from one of the top oil consumers, China, Commerzbank said in a report. Prices of Brent crude oil are expected to decline to $60 per barrel next year and prices of West Texas Intermediate crude oil are expected to fall to $57 per barrel, according to the German bank.

Prices are likely to fall more due to the significant expansion of supply by the Organization of Petroleum Exporting Countries and its allies, which has increased its oil production by 2 million barrels per day since April to regain market share. Despite a pause in production increase that was recently announced for Jan-Mar, "the willingness within OPEC+ to further reverse the remaining voluntary production cuts thereafter is likely to persist," the bank said. "This could bring an additional 1 million barrels per day to the market in the coming year," they added.

At 1452 IST, the most-active December WTI crude oil contract on NYMEX was down 0.7% at $60.59 per barrel and the January contract of Brent crude oil on the Intercontinental Exchange was 0.6% lower at $64.76 per barrel.

According to Commerzbank, oil supply in the global market is likely to rise "more strongly" than oil demand. According to the International Energy Agency's forecast, demand is expected to rise by around 700,000 barrels per day in 2026, which is similar to this year's growth. Demand growth has slowed down in recent years due to weak demand in top crude consumer China. The resulting oversupply is likely to lead to an increase in global oil inventories. Commercial oil stocks in the Organization for Economic Cooperation and Development countries have risen slightly in the last few months mainly because of China's stockpiling, the report said.

"The question is therefore whether China's stockpiling will continue at the same rate in the coming year," Commerzbank said. If not, the oversupply is likely to be reflected in rising inventories outside China and thus also in OECD countries, they added.

On the other hand, there are factors suggesting a lower oversupply in the market as oil output outside OPEC+ could rise less sharply than previously expected. US shale oil companies may stop drilling new oil wells due to lower oil prices. If prices continue to fall further, even more companies will face the question of "whether to maintain or cut their investments in new oil drilling." Almost 80% of the companies surveyed by Dallas Fed stated that they had delayed investment decisions due to uncertainty about price and cost developments, with almost half of them doing so significantly, Commerzbank said.

The sanctions imposed by US President Donald Trump on Russia's two largest oil companies, Rosneft and Lukoil, which are in effect from Nov. 21, are also an additional risk to oil supplies. "The amount of Russian oil stored in tankers without buyers is said to have risen significantly. However, Russia has repeatedly proven over the past three years that it can find ways and means to continue bringing its oil to market," it said.  End

US$1 = INR 88.63

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Udita S. Jaiswal

Edited by Tanima Banerjee

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