Published by Global Banking & Finance Review®
Posted on November 12, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleOil prices dropped over $2 as OPEC forecasts a supply-demand balance by 2026. This shift impacts market trends and economic factors, with Brent and WTI crude seeing significant declines.
By Erwin Seba
HOUSTON (Reuters) -Oil prices fell more than $2 a barrel on Wednesday, weighed down by an OPEC report saying global oil supply will match demand in 2026, marking a further shift from its earlier projections of a supply deficit.
Brent crude futures settled at $62.71 a barrel, down $2.45, or 3.76% after gaining 1.7% on Tuesday. U.S. West Texas Intermediate crude finished at $58.49 a barrel, down $2.55, or 4.18%, after climbing 1.5% in the previous session.
The Organization of the Petroleum Exporting Countries noted that world oil supply would match demand next year due to the wider OPEC+ group's production increases. Previously, it had projected a supply deficit in 2026.
"The prospect that the market is in balance is definitely what drove down prices," said Phil Flynn, senior analyst with Price Futures Group. "The market wants to believe it's balanced. I think the market took OPEC more seriously than IEA."
The International Energy Agency forecast in its annual World Energy Outlook that oil and gas demand could continue to grow until 2050. That was a departure from the IEA's previous expectation that global oil demand would peak this decade, as the international body moved away from a forecasting method based on climate pledges.
John Kilduff, partner at Again Capital, said the OPEC outlook comes as some crude sellers cannot find buyers.
"There are cargoes going begging," Kilduff said. "The very front of the market is forming a new price curve. There's just a general sense of weakness in the U.S. economy."
Analysts have previously highlighted that crude oversupply is curbing price gains. OPEC+ agreed this month to a pause in increasing its output in the first quarter of next year, after having unwound its cuts to production since August this year.
US GOVERNMENT REOPENING
The reopening of the U.S. government could boost consumer confidence and economic activity, spurring demand for crude oil, IG analyst Tony Sycamore wrote in a note.
The U.S. Republican-controlled House of Representatives is set to vote later on Wednesday on a bill, already signed off by the Senate, that would restore funding to government agencies through January 30.
The U.S. Energy Information Administration will release its outlook on Thursday.
(Reporting by Erwin Seba in Houston, Seher Dareen and Enes Tunagur in London, Colleen Howe in BeijingEditing by Jane Merriman, Hugh Lawson, Rod Nickel and David Gregorio)
Brent crude futures are contracts for the future delivery of crude oil from the North Sea. They are used as a benchmark for oil prices globally.
Supply-demand balance refers to the equilibrium where the quantity of a product supplied equals the quantity demanded. In oil markets, this balance affects pricing and production decisions.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is known for its light and sweet characteristics, making it desirable for refining.
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