Short-term Brent crude buying with $65.9 target

The global oil market remains heavily imbalanced, with production growth significantly outpacing consumption.

1. Supply surplus

In early 2026, we see a substantial supply glut. According to the International Energy Agency’s (IEA), this surplus may surge to 4.25 million barrels per day (bpd) by the end of the first quarter (Q1).

The issue is driven by several factors:

Record non-OPEC+ production. The US, Canada, Brazil, Guyana, and Argentina are the main contributors. All nations outside the alliance are expected to boost their output by 1.2–1.3 million bpd.

OPEC+’s revised strategy. Following a prolonged period of voluntary supply cuts, the group began easing these restrictions, bringing more crude to the market. The outlook for 2026 suggests the cartel will add 1.2 million bpd to global production levels.

Accumulated energy reserves. Last year saw massive inflows into oil inventories, creating a significant “safety cushion” in the world. Under current circumstances, however, these reserves act as a cap on crude prices, limiting upside even amid escalating geopolitical tensions.

Seasonal demand drop. Oil refineries typically conduct maintenance in Q1, temporarily reducing their need for raw materials and leading to overstocking.

2. Tepid demand

The IEA predicts global demand will increase by 930,000 bpd, up from 850,000 bpd in 2025. Despite this rise, consumption remains insufficient to match the accelerated production growth and continues to lag behind historical averages.

Key drivers of slowing demand include:

Electrification and energy transition. The widespread adoption of electric vehicles and improved energy efficiency in developed countries are undermining the long-term need for gasoline and diesel.

Complex macroeconomic environment. Some nations are still suffering from an economic downturn following periods of high inflation and trade uncertainty.

Uneven demand growth. Virtually all consumption increases in 2026 are expected from non-OECD countries (primarily China and India), while the situation in developed economies will be entirely different, with stagnation being in play.

Petrochemicals. Steady demand for petrochemical feedstocks is the only reliable driver, partly offsetting the decline in transportation fuel consumption.

Market consensus suggests that crude production is rising three times faster than demand, confining Brent prices to the $60–$70 per barrel range in 2026.

From a technical perspective, the formation of an ascending triangle on today's chart indicates that a potential breakout could propel quotes toward $65.9, despite the fundamental headwinds.

The overall recommendation is to buy Brent crude. Profits should be taken at $65.9. Stop Loss could be set at $64.9.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.