HOUSTON, October 17, 2025 — Oil markets are poised to record their first significant weekly decline in nearly a month, as easing geopolitical tensions and signs of a growing supply glut weigh on investor sentiment.

According to Reuters, both Brent crude and U.S. West Texas Intermediate (WTI) saw modest gains on Friday but were on track for an overall weekly loss of about 3%.

• Brent crude futures settled at $61.29 per barrel, up $0.23, or 0.38%.
• WTI crude finished at $57.54 per barrel, up $0.08, or 0.14%.

Despite the slight uptick, analysts say mounting evidence of oversupply and waning demand could keep oil prices under pressure heading into November.

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IEA Warns of Growing Oil Glut in 2026

The International Energy Agency (IEA) issued a sobering forecast this week, warning that the global oil market is heading toward a surplus by 2026, driven by increased production from the United States and OPEC members, alongside slowing consumption growth in Asia and Europe.

The IEA’s outlook compounded bearish sentiment already sparked by the U.S. Energy Information Administration’s (EIA) latest data, showing a 3.5-million-barrel rise in U.S. crude inventories last week — far above analyst expectations for a modest 288,000-barrel increase.

Adding to the pressure, U.S. oil production climbed to a record 13.636 million barrels per day, signaling continued supply growth even as global demand softens.

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Geopolitical Tensions Ease: Ukraine and Gaza Ceasefires in Focus

Oil traders also reacted to geopolitical developments that reduced the “risk premium” traditionally baked into energy prices.

U.S. President Donald Trump and Russian President Vladimir Putin announced plans for a new summit in Hungary to discuss a potential Ukraine ceasefire, while a temporary truce in Gaza between Israel and Hamas has halted fighting for the first time in months.

“An unprecedented amount of risk has come out of the market,” said Phil Flynn, senior analyst at Price Futures Group. “With Iran neutralized, the Middle East stabilizing, and now peace talks on Ukraine, traders are reassessing the geopolitical threat landscape.”

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Economic Headwinds Add to Oil Market Uncertainty

Concerns about a global economic slowdown are further dampening oil demand prospects. Rising U.S.-China trade tensions, slowing manufacturing data, and weak industrial output in Europe have combined to fuel fears of a broader downturn.

“It just demolishes confidence,” said Jorge Montepeque, Managing Director at Onyx Capital Group. “We could see the U.S. economy feel the effects faster than expected.”

In addition, a fire at BP’s Whiting refinery in Indiana — one of the largest in the U.S. Midwest — caused localized disruptions. Analysts expect a temporary spike in gasoline prices around the Great Lakes region, but not enough to impact national supply.

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Oil Market Outlook: Short-Term Stability, Long-Term Oversupply

While near-term geopolitical calm and localized refinery issues could cause short-lived fluctuations, the broader outlook remains cautious.

With refineries entering autumn maintenance cycles and inventories swelling, analysts warn that crude prices may continue to drift lower. The combination of high output, easing tensions, and moderate demand paints a picture of a well-supplied market heading into 2026.

“Unless we see a meaningful production cut or a major disruption, the fundamentals point toward continued price weakness,” said one Houston-based energy strategist.