Crude oil futures attempted to post a recovery this week after falling to fresh four-month lows last Thursday. November WTI crude traded as high as $62.92 a barrel on Wednesday but failed to hold onto gains through the end of the session and into Thursday. Prices had been unable to trend higher since rallying this summer. Bearish fundamentals have broadly overshadowed geopolitical risks in the markets. 

The Energy Information Administration’s weekly petroleum status report showed that U.S. commercial crude oil inventories rose sharply last week, though stocks remain near seasonal lows. Additionally, U.S. crude oil production rose to a new daily record last week. 

The EIA expects WTI crude oil prices to fall to an average of $62 a barrel in the fourth quarter of 2025, a level futures have gravitated toward for much of the past two months. Additionally, the EIA predicts prices to fall as low as $46 a barrel in the first quarter of 2026. That would represent the lowest spot price for crude since December 2020. 

The EIA expects global oil inventories to grow through 2026, putting significant downward pressure on prices over the next few months. Much of that growth is expected for countries outside of OPEC+ countries, namely the U.S., Brazil, and Canada.

Israel and Hamas have reportedly agreed to phase 1 of a peace deal brokered by President Trump this week. Both sides agreed to a ceasefire, as well as a hostage relief. The idea of cooling tensions in the Middle East could further provide bearish pressure to the energy markets. 

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