Unlike XAUUSD or the S&P 500, which have risen since the start of the year, oil prices have dropped nearly 15%, putting producers in a challenging, though not critical, position. The issue isn’t weak energy demand; on the contrary, demand remains strong, especially with the growth of artificial intelligence. The real problem is oversupply, with forecasts even pointing to a potential surplus.

For example, the IEA predicts a surplus of 4 million barrels per day by 2026. According to Vortexa, oil tankers are currently carrying a record 1.3 billion barrels at sea. Even OPEC+ acknowledges the market is entering an oversupply situation, despite tighter U.S. sanctions on Russian oil.

So, is there any chance that the trend will reverse?

Fundamentals suggest it might.

It all begins with OPEC+’s decision to slow the pace of production increases next year. Specifically, eight member countries plan to add about 137,000 barrels per day in December, then pause any further increases in January, February, and March. Officially, this is attributed to the usual seasonal dip in demand, but it also seems intended to ease concerns about oversupply.

Geopolitics could also push prices higher. In particular, a potential U.S. military operation in Venezuela could have a significant impact, given that Caracas produced 1 million barrels per day in September. President Trump has also raised the possibility of sending troops to Nigeria, one of Africa’s largest oil producers, or even carrying out airstrikes. Meanwhile, in the Middle East Iran remains a black swan.

Finally, oil could benefit from the global economy’s resilience. According to World Economics, the Global Sales Managers’ Index reached 51.5 points in October, signaling moderate expansion. While 57% of companies (28 out of 49) have issued negative EPS guidance for Q4 2025,matching the five-year average but below the ten-year average of 61%, this suggests that corporate outlooks aren’t overly pessimistic.

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