West Texas Intermediate (WTI), the US crude oil benchmark, is trading near the $64.00 mark during early European hours on Friday. Prices retreat after reaching their highest level since late September, as rising oversupply concerns weigh on market sentiment.
Global crude oil production outpaced consumption throughout 2025, resulting in notable inventory builds that continue to pressure prices. The International Energy Agency (IEA) expects the surplus to persist into 2026, forecasting an average oversupply of more than 3.7 million barrels per day (bpd) over the year.
Additional pressure comes from renewed strength in the US Dollar (USD), which tends to weigh on USD-denominated commodities. The Greenback rebounded after reports that former US President Donald Trump and Senate Democrats reached an agreement to avert a government shutdown. The US Senate is expected to vote on a temporary funding package after Democrats agreed to remove the full-year Department of Homeland Security (DHS) spending bill.
However, losses in WTI may be limited by escalating geopolitical tensions involving Iran. Trump warned Tehran to reach a nuclear agreement or risk military action, stating that US naval forces in the region were prepared to act “with speed and violence, if necessary.”
Iran responded by threatening retaliation against the US, Israel, and their allies. Heightened geopolitical risks surrounding Iran—OPEC’s fourth-largest oil producer with output of around 3.2 million bpd—could lend near-term support to crude prices.
