Oil prices fall as projected supply surplus for next year offsets geopolitical concerns
Crude oil benchmarks fell more than two percent on Friday as investors focused on a projected 3.84 million barrel per day supply surplus expected for 2025.
Insights:
Global crude prices settled sharply lower on Friday, December 26, 2025, as market participants reacted to forecasts of a significant supply surplus. Brent Crude Oil futures settled down $1.60, or 2.57 percent, at $60.64 per barrel. Simultaneously, WTI Crude Oil futures finished the session down $1.61, or 2.76 percent, to settle at $56.74 per barrel. These declines come as investors weigh the International Energy Agency’s December report, which projects that global oil supply will exceed demand by 3.84 million barrels per day in 2025.
The current downward pressure on prices is part of a broader trend that has seen benchmarks on track for their steepest annual decline since 2020. To date, Brent Crude Oilis down 19 percent for the year, while WTI Crude Oilhas decreased by 21 percent. While supply disruptions helped prices rebound from a five-year low recorded on December 16, the underlying market narrative remains dominated by rising crude output and structural oversupply concerns heading into the new year.
