Brent crude trades near $72 and WTI below $69, their lowest since late winter, as US-Iran diplomatic progress in Qatar drains the geopolitical risk premium. Abundant global inventories cap any rebound, and institutional 2026 forecasts for Brent range from $56 to $70.
Brent crude trades near $72 per barrel while WTI sits below $69, the lowest levels since late winter. The slide follows positive US-Iran diplomatic developments in Qatar, which eased fears of a supply shock and pulled risk premiums out of the price.
The reversal is sharp. On February 28, US-Israeli air strikes on Iran effectively closed the Strait of Hormuz, the route for roughly 20% of global oil demand, and Brent futures approached $120 per barrel. As diplomacy gained traction, the Strait began reopening and that premium evaporated.
Supply glut caps the rebound
Bearish supply-demand fundamentals persist. The International Energy Agency projects a potential oversupply of 3.7 to 4.0 million barrels per day, and global inventories have grown by roughly 180 million barrels over 90 days. US crude output is forecast at a record 13.6 million barrels per day in 2026, while Brazil, Guyana and Argentina add further non-OPEC barrels.
Because of that build, OPEC+'s market power has weakened considerably. The group approved a modest 137,000 barrels per day increase, its third consecutive monthly rise, and has signaled larger scheduled production increases beginning in August, prioritizing member unity over defending price levels.
Demand and the dollar add pressure
Asian demand looks soft. Chinese refinery throughput fell 0.9% month-on-month to 14.86 million barrels per day, the lowest in six months. A firmer greenback compounds the drag: markets now price the probability of a September Federal Reserve cut at about 60%, and the US Dollar Index has held around 97.50, raising the cost of dollar-priced crude.
Forecasts split wide
Institutions disagree on where prices land. Goldman Sachs holds the most bearish stance at Brent $56 and WTI $52, while the EIA sees Brent near $70 by year-end and J.P. Morgan bases its case on $60 Brent. For traders weighing how to trade crude oil, the base case keeps Brent in a $65-75 range, with a negotiation breakdown seen as the main upside risk toward $90.
Source: Intellectia AI
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