"West Texas Intermediate (WTI) crude has fallen below $60 per barrel due to a combination of oversupply and weak demand. Global oil inventories are rising, putting downward pressure on prices. At the same time, both OPEC+ and U.S. production were increasing amid relatively stable global oil demand, as OPEC+ sought to regain market share. Some banks expected WTI prices to be below $60 for all of 2026."
"OPEC+ recently announced plans to unwind its production cuts, with the increases being lower than those initially proposed. The U.S. Energy Information Administration had said it expects the price of crude oil to average near $50 per barrel through 2026, as more supply is added to an already well-supplied market. This was the status quo until recently, when OPEC+ announced it would pause its production increases after December, citing concerns about a global oil glut."
"While concerns about global economic growth and potential recession have weighed on demand expectations, some of those worries are fading. Earlier in the year, tariff-related uncertainty also contributed to price volatility, although some of those concerns have since disappeared. The combination of these factors has pushed prices briefly to their lowest levels since 2020. This allows investors to start buying the mega-cap dividend-paying giants in the industry at a bargain price, especially after the OPEC+ production increase halt."
WTI crude declined below $60 per barrel as oversupply and weak demand drove global inventories higher and weighed on prices. OPEC+ and U.S. production rose while global demand remained relatively stable, with OPEC+ seeking market share and later unwinding some cuts. The U.S. Energy Information Administration projects crude near $50 per barrel through 2026 as supply grows, and some banks expect sub-$60 WTI into 2026. OPEC+ paused planned increases after December amid glut concerns. Prices fell to lows not seen since 2020, making large, dividend-paying integrated oil companies attractive purchases. BP pays a 5.88% dividend and operates in Gas & Low Carbon Energy and Oil Production & Operation.
Read at 24/7 Wall St.
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