Oil prices fell nearly 2% on Thursday, defying one of the strongest clusters of bullish indicators seen this month—from OPEC’s optimistic December outlook and a narrower IEA oversupply forecast to fresh U.S. crude inventory draws.
Brent futures slipped toward $61, while WTI drifted toward $57, extending a losing streak that has dominated most of December.
OPEC, IEA, and U.S. Data All Lean Supportive
OPEC’s December Monthly Oil Market Report kept a firm demand outlook for 2025–2026, citing resilient consumption in China, India, and the Middle East. The group also reiterated that non-OPEC supply growth is expected to slow after 2025, while OPEC+ production management remains central to market stability, an outlook notably more optimistic than the IEA’s earlier glut warnings.
The IEA also softened its stance. For the first time since May, the agency trimmed its projected 2026 surplus, lowering the estimated glut from 4.09 million bpd to 3.84 million bpd as sanctions on Russia and Venezuela curb exports. Stronger global demand and improved macroeconomic sentiment led the agency to lift its 2026 demand growth estimate by 90,000 bpd.
In the United States, fundamentals pointed in the same direction. API reported a 4.8-million-barrel draw, while EIA data confirmed a 1.8-million-barrel decline in crude stocks, reinforcing firm winter consumption.
Geopolitics added further upside risk. Ukraine announced that SBU drones struck Russian oil assets in the Caspian Sea—its first attack in that region—hitting infrastructure tied to Lukoil and expanding the conflict’s energy footprint.
Prices Fall Anyway as Market Sentiment Overrules Fundamentals
Despite the supportive data, futures continued to weaken. Traders cited thin pre-holiday liquidity, algorithm-driven selling, and broader fund de-risking as key drivers, with the forward curve staying notably flat.
The disconnect underscores a December market driven more by sentiment than by supply-demand balances—at least for now.