West Texas Intermediate crude went on to trade sharply lower through December 12, 2025, settling at $57.60 per barrel and also posting a week-to-date loss of $2.48, or 4.13%. Market sentiment went on to stay firmly bearish as traders made sure to focus on soft demand projections, heavy global supply, as well as fading geopolitical premiums. The tone heading into December 12 remained pressured due to fundamental forces, which continued to outweigh the short-lived intraday rebounds.
Oversupply has gone on to become the defining feature of the market, with traders going ahead and questioning whether the upcoming catalysts are actually robust enough so as to offset the rising imbalance, which may stretch into early 2026.
OPEC+ Output Strategy Goes on to Pressure Oil Price Forecast
OPEC+ continued to lift the global supply due to its aggressive unwind of voluntary production cuts, a move that began earlier in 2025 and also gained speed into the year-end. The move by the group to restore the overall 2.2 million barrel per day reduction by September 2025, which was a full year ahead of schedule, set the tone for a market that, by the way, is now consistently oversupplied. December discussions kept the output pretty balanced for the first quarter of 2026; however, the traders widely anticipate the increases later in 2026, specifically from Saudi Arabia, since it goes on to push to reclaim market share from the non-OPEC producers.
IEA data went on to reinforce the oversupply narrative, reporting that the world oil supply touched 109 million barrels per day in November 2025. While the sanctioned producers saw temporary dips, an ever-increasing output from OPEC+, the U.S., along with certain other non-OPEC regions, went on to contribute towards a global environment wherein the barrels outpaced consumption when it came to a sustained basis. When it comes to the retail futures traders, the message from the physical market goes on to remain pretty clear – supply continues to build, which has had limited rallies in the past and has contributed to downside pressure when the market fails to keep pace.
Demand Growth Still Underwhelming In spite of the Fed rate cut
It is worth noting that the demand forecasts have offered a little relief. The IEA went on to lift its 2026 demand outlook; however, it still sees only modest growth, which equals 830,000 barrels per day in 2025 and 860,000 barrels per day that are expected in 2026. OPEC stood by its much more bullish 1.4 million barrel per day forecast for 2026, although the traders have increasingly discounted it because of consistent economic softness in Europe, slower-than-anticipated consumption in China, and also ongoing substitution away from oil when we talk of the Middle East.
The Short-Term Energy Outlook by the EIA went on to add more weight to the bearish tone by forecasting just 1.1 million barrels per day of demand growth in 2025 and 1.2 million in 2026. These numbers do suggest that the inventories are more likely to remain quite elevated unless the supply slows quite prominently.
The Federal Reserve’s rate cut on December 12 offered a glimmer of potential support when it comes to consumption by way of reducing the borrowing costs. However, the caution by the Fed about more cuts muted any sort of an immediate effect when it comes to the energy demand anticipations.
Geopolitics lifts off the support rather than creating it
Apparently, Russia-Ukraine diplomacy took center stage as peace efforts went ahead and advanced, stripping away any sort of risk premiums that had in the past offered the market that occasional support. The announcement pertaining to productive discussions that involved the U.S. as well as the European officials pushed the traders to price in lower geopolitical risk.
Even then, the supply picture of Russia stayed complicated. Ukrainian drones went ahead and struck a Caspian Sea rig for the first time, leading to temporarily halting the operations. Russian oil revenue dipped to $11 billion in November 2025, which was the lowest since early 2022, as the sanctions teamed with attacks curbed exports. Black Sea shipments dropped steeply, and Western sanctions on Rosneft as well as Lukoil continued to disrupt the flows. Yet Russia still went ahead and moved barrels by way of the shadow fleet tankers, shipping majorly to China as well as India.
Interestingly, in Venezuela, the U.S. seizure of a large tanker went on to raise the tensions and also pushed the Asian buyers to demand much steeper discounts. Venezuelan production went on to hold between 950,000 and 1,130,000 barrels per day, with almost 85% of the exports heading to China post the Chevron license being revoked earlier in 2025. While the global supply effect went on to remain pretty modest, traders did note a growing uncertainty surrounding the future exports from Venezuela.
U.S. Inventory Data, along with the Output Growth, Adds to Bearish Tone
The EIA went on to report that the 1.8-million-barrel crude inventory draw for the week ending December 5, 2025, brought the stocks to 425.7 million barrels, which is around 4% below the five-year average. Gasoline as well as the distillate inventories increased, whereas the total commercial petroleum stocks dipped 3.2 million barrels. The draw failed to lift prices as the wider supply outlook went on to overshadow the weekly snapshot.
Apparently, the U.S. production continues to see growth, with domestic output forecasted to reach a record 13.6 million barrels per day in 2025. The re-benchmarking from EIA added yet another 52,000 barrels per day to estimates, thereby signaling a stronger-than-anticipated performance from the shale producers. With West Texas Intermediate crude trading below $60, the traders still went on to question if the growth can hold, since many Permian producers need prices more than $62–64 to break even.
Trend Indicator Evaluation
Light crude oil futures are indeed on track so as to finish the week lower after a two-week rally fizzled out after failing to overcome the major resistance levels, such as the 52-week moving average at $61.96, along with the long-term 50% level at $63.69.
The market went on to pierce the previous swing bottom at $57.10, hence confirming the downtrend and also opening the door for follow-through selling into the major swing bottom at $55.01.
The $55.91 main bottom was indeed robust enough to trigger a spike to $62.54 in late October 2025; hence, a failure to hold this week could as well fuel the start of a speeding up to the downside.
It is well to be noted that although the market may go on to experience some bottom-picking as well as short-covering rallies, it is somewhat challenging to imagine the beginning of a meaningful rally till the time the buyers overcome the 52-week moving average and go ahead and create enough upside momentum in order to break out over the $63.69 pivot.
The Weekly Technical Forecast
The direction when it comes to the weekly Light Crude Oil Futures market for the week ending December 19 is most likely to get determined by trader reaction pertaining to the Fibonacci retracement level at $59.39.
Bullish Scenario
A sustained move above the Fibonacci level at $59.39 will signal renewed buying interest. If this move generates sufficient upside momentum, a retest of the 52-week moving average at $61.96 could follow.
A Bearish Scene
A sustained move below the 61.8% level at $59.39 is going to point to active selling pressure. This could as well go on to trigger a sharp decline to $55.91, with the potential for an extended move down to $55.22 or lower.
Short-Term Market Forecast – Looks Bearish Into Next Week
The decline by West Texas Intermediate crude goes on to reflect an environment that is defined by oversupply, weak demand growth, and decreased geopolitical pricing support. While the peace talks and Venezuelan tensions, as well as the sanctions when it comes to Russia, may as well go ahead and create intraday volatility, none go on to counter at present the much wider fundamental imbalance. The market has headed into the week ending December 19 with a bearish short-term outlook, leaving the traders watching for any sort of supply disruptions or shifts in OPEC+ messaging, which could also temporarily support the prices. For now, the oversupply trend goes on to signal a continued downside risk till the time a major catalyst edits the fundamental backdrop.
Technically, the market still goes on to remain under immense pressure below the 52-week moving average at $61.96. Post solidifying the resistance, bearish traders are looking to be in a position to work on the downside. Near-term potential targets go on to include swing bottoms at $57.10 and $55.91, as well as $55.22. The latter could indeed be the trigger point for a speeding up to the downside.
