Sevens Report: Oil Market Faces Record Surplus Despite U.S.-China Trade Truce
Tyler Richey warns crude prices could fall to mid-$30s as 2026 supply glut looms.
An oil supply glut could sink prices to $35 a barrel next year. Why the U.S.-China trade truce won’t change that.
While President Trump’s trade truce with China offered a brief dose of optimism, Sevens Report Research warns it won’t offset an impending record oil surplus. Co-editor Tyler Richey told MarketWatch that the deal “does not change the current physical market math,” which still points to a 2026 supply glut averaging 4 million barrels per day, according to World Bank and IEA data. Richey cautioned that WTI crude could drop to the mid-$30s if forecasts hold, echoing the 2010s OPEC price war. Despite the tariff resolution, oil prices barely moved, as analysts see little change in supply-demand dynamics. Richey said only a major geopolitical shock or a global growth surge could shift the bearish outlook, noting fundamentals “remain tilted in favor of the oil bears.”
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