Crude Oil Prices Hold Above $60 as Fed Rate-Cut Bets Clash With Oversupply Fears (Dec 5

Crude oil markets ended the week of 5–7 December 2025 balanced on a knife edge:
Brent crude hovering in the mid‑$60s, WTI holding just above $60, as traders weighed looming U.S. Federal Reserve rate cuts against persistent worries about oversupply and soft demand.

On Friday 5 December, Brent futures settled around $63.75 per barrel and WTI at $60.08, the highest closes since mid‑November and marking a second straight week of gains for both benchmarks. ^[1] Yet the optimism was tempered by signs of weakening U.S. demand, widening discounts on Russian grades into Asia, and a wall of supply projected for 2026.

Below is a detailed crude oil commodities wrap‑up for 5–7 December 2025, covering prices, drivers, forecasts and what it all means for traders, producers and energy‑intensive businesses.

Key Takeaways for the Week in Crude Oil

Brent and WTI held above key $60 levels, with Brent near $64 and WTI near $60, supported by expectations of a Fed rate cut and geopolitical risks. ^[2]
Short‑term sentiment is cautiously bullish, but 2026 is shaping up as an oversupply year, with major institutions projecting lower average prices. ^[3]
Russian crude flows are in flux: ESPO barrels to China are at record discounts, while the G7 moves to replace the price cap with a tougher maritime services ban. ^[4]
Demand signals are mixed: soft U.S. consumption and cheap gasoline contrast with Morningstar’s view that global oil demand still won’t peak until 2032. ^[5]
Technical analysts see $59–$64 as the near‑term battleground, with bulls eyeing a breakout above the 50‑day and 200‑day moving averages. ^[6]

Where Crude Oil Prices Stand: Brent and WTI Snapshot

Futures closes and ranges

On Friday, December 5:

Brent crude (ICE)
- Settled around $63.75/bbl, up about 0.8% on the day and roughly 1% on the week. ^[7]
- Hit its highest close since 18 November, underscoring improving sentiment after a weak autumn.
WTI crude (NYMEX)
- Settled near $60.08/bbl, up around 0.7% on the day and about 3% on the week. ^[8]
- Futures traded in a relatively tight $59–$60.5 band, with analysts noting repeated defenses of support in the high‑$58s to high‑$59s. ^[9]

Intraday commentary from multiple desks echoed a similar story: WTI futures held firm above short‑term retracement support at roughly $59.23–$58.44, with traders watching whether a sustained push above the 50‑day moving average around $59.8–$60 could open the way toward the 200‑day moving average near $61–$61.5. ^[10]

Trading activity

On the futures side, light sweet crude contracts on NYMEX saw estimated volume of around 572,000 contracts on Friday, down from roughly 639,000 the previous session, with open interest slipping by more than 21,000 contracts to about 1.95 million. ^[11]

That slight drop in both volume and open interest suggests some traders chose to take profits or step to the sidelines ahead of next week’s Fed meeting (9–10 December) and a dense calendar of geopolitical catalysts.

Macro Drivers: Fed Rate Cut Hopes vs. Weak U.S. Demand

Rate‑cut expectations are supporting crude

The single biggest macro driver this week was the U.S. Federal Reserve.

Traders are pricing in roughly an 85–87% probability of a 25‑basis‑point rate cut at the Fed’s December 9–10 meeting, according to derivatives pricing referenced in both oil and equity coverage. ^[12]
A rate cut would weaken the dollar and support economic activity, both bullish for oil demand and prices.

Reuters reported that crude prices “edged up nearly 1% to a two‑week high” on Friday, explicitly linking the move to growing expectations of a Fed cut and the potential boost to energy demand. ^[13]

But demand indicators in the U.S. are flashing amber

Despite the modest price rebound, demand in the U.S. looks soft:

A detailed weekly recap from Marketforces Africa described the oil market as having “closed bearish” on the week due to weakening U.S. demand, even as prices held near $60. ^[14]
U.S. gasoline prices have dropped below $3 per gallon for the first time since 2021, reflecting both strong supply and moderating demand. ^[15]

The combination of slowing U.S. consumer spending, a softer labor market and cheaper pump prices is keeping refiners cautious and contributes to the broader narrative of an oil market that is well supplied, if not outright oversupplied, heading into 2026.

Geopolitics: Ukraine, Venezuela and G7 Russia Sanctions

Ukraine peace talks: risk premium with no resolution

Geopolitics remain a core pillar of crude oil pricing:

The failure of U.S.–Russia talks in Moscow to deliver a breakthrough on Ukraine has left a risk premium embedded in prices, even as traders quietly acknowledge oversupply. ^[16]
Ukrainian drone attacks on Russian energy infrastructure, including a port at Temryuk on the Azov Sea, have reinforced concerns about regional supply disruptions and Black Sea shipping risk. ^[17]

A weekend note from FX Leaders highlighted that WTI settled above its 50‑day moving average and “closed above $60 per barrel” as investors weighed uncertain prospects for a ceasefire in Ukraine against fears that a peace deal could bring more Russian barrels back to market, pressuring prices lower. ^[18]

Venezuela tensions: potential downside supply shock

Markets are also watching Venezuela:

U.S. President Donald Trump reiterated that Washington plans to take action against Venezuelan drug traffickers “very soon”, a move Rystad Energy estimates could put at risk around 1.1 million barrels per day of Venezuelan crude output, much of it exported to China. ^[19]

Any significant disruption to Venezuelan flows would tighten heavy‑sour crude supply, potentially steepening differentials for similar grades and supporting Brent.

G7’s new tanker ban: sanctions 2.0 on Russian crude

Beyond the battlefield, the policy front could reshape seaborne flows in 2026:

The G7 and EU are planning to replace the existing price cap on Russian oil with a full maritime services ban on transporting Russian crude using Western shipping, insurance and finance by early 2026. ^[20]
Russia has already shifted heavily to a “shadow fleet” of older tankers and non‑Western services; only about 38% of its seaborne crude exports use G7‑compliant vessels. ^[21]
Russia produced roughly 9.3 million barrels per day in October, about 9% of global supply, with more than half exported. ^[22]

The upshot: if enforcement is strict, flows could be interrupted and prices supported; if it’s lax, Russian barrels are likely to continue reaching China, India and Turkey, albeit at deeper discounts.

Russia’s ESPO Discounts Signal Softer Asian Demand

One of the week’s most striking crude stories came from the ESPO blend, a key Russian grade shipped from the Far East:

December‑loading ESPO cargoes to China traded at a record discount of $5–$6 per barrel below ICE Brent, far wider than the $0.50–$1 discount seen in late October. ^[23]
The steep discount reflects falling demand from Chinese state refiners, many of whom have paused purchases in response to U.S. sanctions imposed in October on Russian companies Lukoil and Rosneft. ^[24]
Traders report that some December cargoes remain unsold, an unusual situation for ESPO, which normally sells out quickly thanks to its short shipping time to Asia and attractive yields. ^[25]

This dynamic matters well beyond Russia:

Deep ESPO discounts drag down price benchmarks for similar medium‑sweet grades competing in Asia.
They reinforce the narrative that China’s incremental crude demand is slowing, at least in the near term.
They highlight the uneven impact of sanctions, which have not cut Russian supply outright but have forced deeper discounts and more complex trade flows.

Structural Oversupply: 2026 Oil Market Looks Heavy

While short‑term prices have firmed, virtually all major forecasters see downside pressure on crude over the next 12–18 months.

EIA: Rising inventories and lower Brent in 2026

The U.S. Energy Information Administration’s Short‑Term Energy Outlook now projects:

Global oil inventories will continue to build through 2026, exerting downward pressure on prices.
Brent crude is forecast to average about $54/bbl in Q1 2026 and $55/bbl for all of 2026. ^[26]

Those forecasts sit well below current spot prices in the low‑$60s.

Reuters poll: “Large and unprecedented” 2026 surplus

A Reuters survey of 35 economists and analysts published on 28 November reinforces the oversupply thesis:

Analysts expect Brent to average $62.23/bbl in 2026, down from an earlier forecast of $63.15.
WTI is projected around $59/bbl. ^[27]
The poll suggests a market surplus ranging from 0.5 to 4.2 million barrels per day in 2026, compared with 0.19–3.0 mb/d in the previous poll. ^[28]
Based on IEA data, the implied surplus could be over 4 mb/d, while OPEC’s own numbers point to a near‑balanced market if the group maintains current output. ^[29]

One analyst described the 2026 crude market as “large and unprecedented” in terms of oversupply, noting that geopolitical risks will keep a risk premium that prevents prices from collapsing much below $60. ^[30]

World Bank and banks: Lower for longer

The World Bank’s October 2025 Commodity Markets Outlook projects that:

Global commodity prices will fall to a six‑year low in 2026.
The broad commodity index is expected to drop about 7% in both 2025 and 2026, driven by weak global growth, an expanding oil surplus and policy uncertainty. ^[31]

Major banks broadly agree:

J.P. Morgan Research now expects Brent at $66/bbl in 2025 and $58/bbl in 2026, maintaining a downward trajectory despite recent short‑term rallies. ^[32]
A separate Goldman Sachs outlook also sees crude prices declining through 2026 amid a surge in supply. ^[33]

Demand Outlook: 2032 Peak, Not an Immediate Collapse

While the next 1–2 years may be defined by oversupply, the long‑term demand picture is more nuanced.

Morningstar: Demand peak delayed to 2032

In a fresh forecast released 5 December, Morningstar now expects:

Global oil demand to climb from 104 million barrels per day in 2024 to a peak of around 108 mb/d in 2032, before gradually declining.
Demand in 2050 to be about 8% lower than in 2024, at 96 mb/d, but significantly higher than its previous 2050 estimate of 89 mb/d. ^[34]

The resilience comes from sectors that are harder to decarbonize, such as:

Aviation
Marine shipping
Petrochemicals

Morningstar also nudged its mid‑cycle Brent price higher, from $60 to $65, reflecting a tighter marginal cost curve despite growing EV adoption. ^[35]

Qatar’s view: $70–$80 is the “Goldilocks” price

Adding a producer’s perspective, Qatar’s energy minister told reporters on 6 December that:

An oil price in the $70–$80/bbl range is ideal to ensure enough investment in future supply.
Prices above $90/bbl are “too high” and risk-demand destruction. ^[36]

At the same conference, he argued that energy demand from AI and data centers will underpin strong gas and LNG demand, suggesting the broader hydrocarbon complex will remain central to the energy mix through at least the 2030s. ^[37]

Short-Term Technical and Trading Outlook: $59–$64 as the Battleground

Technical analysts and short‑term traders paint a picture of choppy but constructive price action.

Range‑bound, with a bullish tilt

Several key observations from this week’s technical research:

WTI spent most of the week between roughly $58 and $60, briefly dipping below $58 mid‑week before reversing back above $59.7 into the weekend. ^[38]
FXEmpire highlighted support around $59.23–$58.44, with the 50‑day moving average near $59.77 and the 200‑day near $60.98 as key topside levels; a break above those could open a path toward $63–$64. ^[39]
FX Leaders noted that algorithmic traders have begun covering short positions, adding to bullish momentum as WTI closed above both the $60 mark and the 50‑day moving average. ^[40]

A Weekly Crude Oil Futures note from Brooks Trading Course argued that bulls need strong follow‑through buying well above the 20‑week exponential moving average to prove they’ve taken control of the longer‑term trend, while bears still hope these rallies will stall into a major lower high. ^[41]

Weekly forecast (7–12 December): Expect choppiness

DailyForex’s weekly WTI outlook for 7–12 December underlines the likelihood of continued volatility in a tight range:

WTI entered the weekend near $59.7, slightly up from Monday’s open around $59.5 after testing the $58 level mid‑week.
The analysis stresses that the current price may look “high” to short‑term speculators, and suggests waiting for early‑week price action before aggressively entering new positions. ^[42]

Add in the binary nature of next week’s Fed decision and headline‑driven developments in Ukraine, Venezuela and Russian sanctions, and it’s clear crude is primed for sharp but range‑bound moves, rather than a clean trend, in the immediate term.

Investment Angle: Commodities Back in the Spotlight

Beyond pure oil fundamentals, commodities as an asset class are back in vogue.

A widely read note from Bank of America this weekend framed commodities as the top “run‑it‑hot” trade for 2026, arguing that:

The expected environment of strong economic growth, continued fiscal and monetary stimulus and higher inflation makes commodities – especially oil and energy – attractive versus bonds and some equities.
Strategists called “long commodities” and “long despised oil/energy” the standout contrarian trades for next year. ^[43]

While this bullish positioning may seem at odds with 2026 oversupply forecasts, it underlines a key point for investors:

Even if average prices drift lower, crude oil and broader energy exposure can still perform relatively well as part of a portfolio if inflation stays elevated and real assets remain in favor.

What to Watch Next Week

For market participants focused on crude oil commodities, the week following 7 December 2025 will hinge on a handful of catalysts:

Federal Reserve meeting (9–10 December)
- Confirmation (or not) of a 25bp rate cut and updated economic projections.
- Any hint the Fed may cut more aggressively or pause will ripple through crude via the dollar and growth expectations.
Ukraine and Black Sea developments
- Further drone attacks or shipping disruptions could tighten supply routes and bolster the risk premium. ^[44]
Implementation details of the G7 maritime ban
- Traders will watch for any draft guidance or enforcement signals on the full maritime services ban for Russian oil. ^[45]
U.S. inventory and production data
- Fresh EIA data on crude stocks and record U.S. production will shape how quickly the projected 2026 surplus is starting to build. ^[46]
OPEC+ commentary
- Any suggestion that the group might slow its planned unwinding of cuts or even re‑cut if prices slide toward $55 Brent could put a floor under the market. ^[47]

Bottom Line

From 5–7 December 2025, crude oil markets delivered a clear message:

Short‑term sentiment is stabilizing, with Brent and WTI holding above $60 on a combination of Fed rate‑cut bets and geopolitical risk.
Medium‑term fundamentals remain heavy, with 2026 shaping up as an oversupplied year and most major institutions expecting lower average prices than today’s spot levels.
Long‑term demand is not collapsing, but it is flattening, with a likely peak around 2032 rather than a permanent upward march.

For traders, that implies a market dominated by ranges, mean reversion and tactical trades around the $59–$64 zone in the near term. For producers, refiners and corporate hedgers, the message is to lock in margins opportunistically while volatility and a persistent risk premium still offer attractive forward pricing.

As always, this article is for informational purposes only and does not constitute investment advice. Market participants should consider their own risk tolerance and consult a qualified adviser before making trading or hedging decisions.