Oil supply is expected to outstrip demand in 2026, leading to a surplus. Experts forecast prices below $60 per barrel next year due to high inventories. While a short-term glut is expected, a potential supply deficit looms post-2027, urging investments in new exploration.

Geopolitical uncertainties aside, the U.S. Energy Information Administration and Wall Street banks remain pessimistic about oil prices, projecting a bearish trend below $60 per barrel in 2026. Despite a potential short-term oversupply, concerns about a structural deficit after 2027 are rising.

The IEA’s shift in narrative towards advocating for new oil and gas investments highlights concerns about a potential supply crunch post-2027. Rising energy demand globally, coupled with declining upstream investments, sets the stage for a supply deficit in the coming years.

OPEC and major producers warn of a supply shortage if exploration and investments in new supply aren’t ramped up. Saudi Aramco’s CEO emphasizes the need for long-term investments to meet rising energy demand, stressing the urgency for action in the face of a potential supply crunch.

Short-term oversupply could impact oil prices and hinder investments in new supply, especially in U.S. shale if prices stay below $60 per barrel. Market vulnerability increases if non-OPEC+ production slows, particularly in the Americas, highlighting the need for sustained investments in supply.

Read more at Yahoo Finance: Is Oil About to Snap Higher? The Market May Be Too Bearish