For the bears, oversupply is still central to oil price projections for 2026. Despite a stable week, the long-term expectations are still bearish. The U.S. Energy Information Administration’s (EIA) latest Short-Term Energy Outlook projects Brent oil averaging $55 in the first quarter of 2026. This reflects anticipated inventory builds exceeding 2 million barrels per day next year.
The International Energy Agency’s (IEA) supply assessment reinforces the view of the EIA, highlighting global supply growth to rise by 3 million barrels per day in 2025 and another 2.4 million barrels per day in 2026. Meanwhile, it projects demand growth to remain under 1 million barrels per day in both years.
Headlines Drive Price Action in Thin Holiday Trading
Even with these bearish assessments, the market has stopped going down, at least temporarily, because the bullish traders have been reading and reacting to the headlines. These headlines involve Venezuelan and Russian supply. During a holiday week when volume is light, these headlines could lead to exaggerated reactions.
Week Ahead: EIA Storage Report and Geopolitical Tensions in Focus
During the upcoming holiday-shortened week, bearish supply-side traders will be focused on the delayed EIA weekly storage report since there are no other major events scheduled. Bullish traders will be reading the headlines, hoping to react to geopolitical stress including U.S. seizures of Venezuelan crude and Ukraine’s escalating strikes on Russian infrastructure—both of which could introduce uncertainty around short-term supply flows.
Technically, traders are likely to sell rallies, using the 52-week moving average and the long-term 50% level as a cushion until they are overcome with fundamentally-backed buying conviction.
More Information in our Economic Calendar.