Oil Glut to Drag Through 2026: Major Traders Brace for Lower Prices Amid Surging Output and Weak Demand
Forget peak oil. The market's bracing for a flood.
The Supply Tsunami
Major trading desks are signaling a prolonged oversupply. The culprit? A one-two punch of relentless production increases colliding with demand that just can't keep up. It's not a short-term blip—analysts see this surplus defining the market landscape for the next two years.
Demand's Quiet Crunch
While headlines chase geopolitics, the real story is playing out in slower economic engines and shifting energy policies. Consumption growth is stalling, leaving every extra barrel produced with nowhere to go but into already-bloated storage. It's a classic commodity trap, and the exit ramp is a long way off.
The Price Pressure Cooker
This fundamental mismatch has one inevitable outcome: sustained downward pressure on prices. The traditional playbook for a price crash—wait for production cuts—isn't working. The taps are staying open, forcing a brutal market rebalancing the hard way. Get ready for volatility, but with a bearish tilt.
In the end, the smart money isn't betting on a quick rebound. They're positioning for a world awash in crude, where the only thing scarcer than demand is optimism. Another reminder that in global commodities, the 'invisible hand' often comes wearing a brass knuckle.
US tech stocks bounce as bond yields edge up
Outside the oil pits, Wall Street had a better start to Friday. S&P 500 futures ROSE by 0.1%, Nasdaq 100 futures added 0.2%, and the Dow Jones dropped just 22 points. It followed a decent Thursday session, where all three indexes ended higher.
Oracle has surged over 4% premarket, after news that TikTok WOULD sell its U.S. arm to a new group that includes Larry Ellison and Silver Lake.
The Nasdaq Composite jumped 1.4% as tech stocks clawed back earlier losses. The S&P 500 and Dow also snapped a four-day losing streak.
Meanwhile, the 10-year U.S. Treasury yield rose over 3 basis points to 4.149%, while the 2-year climbed to 3.477%. The 30-year yield pushed up to 4.835%. That’s a clear signal that inflation fears aren’t gone. For reference, 1 basis point = 0.01%, and remember, bond yields go up when prices drop.
Here’s where U.S. yields stood Friday:
- 1-month: 3.622% (+0.009)
- 3-month: 3.610% (–0.003)
- 6-month: 3.595% (+0.001)
- 1-year: 3.495% (+0.002)
- 2-year: 3.477% (+0.017)
- 10-year: 4.149% (+0.033)
- 30-year: 4.835% (+0.035)
In the Asia-Pacific, Japan’s Nikkei 225 closed up 1.03% at 49,507.21, and the Topix rose 0.8% to 3,383.66. The yen dropped 0.33% to 156.06 per dollar, and Japan’s 10-year at 2.022%, the highest since 1999, and the 20-year at 2.962%, per Google Finance data.
Over in South Korea, the Kospi rose 0.65% to 4,020.55, while the Kosdaq jumped 1.55% to 915.27. Over in Australia, the S&P/ASX 200 climbed 0.39% to 8,621.40. Hong Kong’s Hang Seng Index added 0.75%, and China’s CSI 300 gained 0.34%, ending at 4,568.18.
Precious metals were mostly steady. Gold hovered at $4,327.33 an ounce, slightly up on the week. It hit a record above $4,381 back in October.
Silver jumped 0.9% to $66.08, NEAR its all-time high of $66.89. Platinum edged down, while palladium rose 0.6%. Meanwhile, the Bloomberg Dollar Spot Index rose 0.2%.
In Europe, stocks were mixed:
- CAC 40 (France): 8,142.08 (–0.11%)
- FTSE MIB (Italy): 44,626.54 (+0.37%)
- FTSE 100 (UK): 9,838.45 (+0.01%)
- DAX (Germany): 24,185.72 (–0.06%)
- IBEX 35 (Spain): 17,119.40 (–0.08%)
- STOXX Europe 600: 584.88 (–0.08%)
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