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Crude oil price is under selling pressure as the market digests concerns over possible oversupply in 2026 and the US-Ukraine deal under works. While investors remain sceptical on whether the peace deal will go through, it has impacted the market sentiment and prices. The end of the Russia-Ukraine war would remove the geopolitical risk premium that has been offering support to crude oil prices.

At the time of writing, the benchmark for global crude oil price, Brent, was trading at $61.83 per barrel after bouncing off the one-month low hit earlier in the session. At the same time, WTI futures remained close to the one-month low hit late last week at $57.89.

Oil market readies for 2026
 

Bears in the crude oil market remain in control as investors digest the looming supply glut. Despite the expected demand growth, experts expect a significant surplus in 2026. 

For instance, the Bank of America expects Brent and WTI crude oil prices to average at $60 and $57 per barrel in 2026 respectively. The pricing is based on its forecast that oil demand may rise by 1 million barrels per day (bpd) in the coming year. At the same time, OPEC+ will be striving to increase its market share while the non-OPEC+ supply surges by 0.8 million bpd. The result is a supply/demand imbalance defined by a surplus of about 2 million bpd.    

Notably, the expected surplus matches Goldman Sachs forecast released about a week ago. However, the International Energy Agency (IEA) expects an even larger surplus of 4.09 million bpd. 

In addition to the looming supply glut, investors are also eyeing the possibility of a peace deal to end the Russia-Ukraine war. Following the US-proposed plan in Geneva, the US and Ukraine negotiators have hinted at “big progress” in ending the war. An agreement to end the conflict would remove the priced-in geopolitical risk premium.

However, investors remain somewhat sceptical over the deal. In past attempts, Russia and Ukraine have failed to agree on the details of a peace deal. Besides, the latest restrictions on Russian oil companies, Lukoil and Rosneft may not be as effective as intended. Following the deadline, India’s refiners are taking advantage of Russia’s Urals crude availed at its cheapest price in two years through non-sanctioned dealers.  

US crude oil price technical analysis
 

WTI crude oil chart | Source: TradingView
 

WTI oil price began the new week on its back foot; trading close to the one-month low hit late last week at $57.36. At the time of writing, the US oil benchmark was at $57.89. 

A look at its daily chart shows the asset trading below the 25-day EMA; an indication that it will likely remain under selling pressure in the ensuing sessions. More specifically, the tight range between $57.36 and $58.54 will be worth watching. 

Beyond that range, the bears will have a chance to pull crude oil price lower to a fresh one-month low at $56.37. On the flip side, the possible rebound will likely face resistance along the 25-day EMA at $59.65.

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