Brent crude averaged $67 per barrel in January 2026, the highest since September 2025. WTI is currently trading near $66.88. But major forecasters say this level is unlikely to hold.

The US Energy Information Administration forecasts Brent at $58 per barrel for the full year 2026 and $53 in 2027. Goldman Sachs sees WTI ending Q4 2026 near $56. The reason is straightforward: supply is growing faster than demand.

Three factors are pushing oil lower.

Global production is outpacing demand. The IEA and EIA both project a supply surplus of 2.1 to 4 million barrels per day in the first half of 2026. OPEC+ kept production flat in Q1 and has no announced plans to increase output.

Inventories are rising. Global oil stocks surged by 477 million barrels in 2025. Preliminary data shows inventories rose a further 49 million barrels in January 2026 alone. Higher storage levels push prices down.

Demand growth is slowing. The IEA revised its 2026 demand growth forecast down to 850,000 barrels per day, citing economic uncertainty and high prices weighing on consumption.

But here is the catch: geopolitics can flip this fast.

WTI jumped above $65 in late February as US-Iran tensions escalated ahead of a Trump-imposed deadline for nuclear talks. Iran exports around 2 million barrels per day. Any disruption to that supply, or a closure of the Strait of Hormuz, would add an $8 or more risk premium to global prices immediately.

That means oil is a two-sided trade in 2026. The trend is bearish, but the event risk is to the upside.

Key levels to watch: WTI support at $62.00. Resistance at $69.00 to $70.00. A break above $70 with geopolitical escalation could push prices toward $75.

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