Brent Could Find Support at the Bottom. Forecast as of 17.10.2025 | LiteFinance
A record surplus of 4 million barrels per day expected in 2026, coupled with the escalation of the U.S.–China trade conflict, has pushed Brent prices back to their spring lows. How long can this decline last? Let’s discuss it and make a trading plan.
The article covers the following subjects:
Major Takeaways
- The IEA forecasts an oil surplus of 4 million bpd.
- U.S. production is hitting record highs.
- China is concealing its stock data.
- A rebound from $59.3, $57.3, or $53.7 could be a buying opportunity for Brent.
Monthly Fundamental Forecast for Oil
A trade war and a massive surplus — what could be worse for the oil market? Brent has fallen to its lowest levels since spring, when Donald Trump threatened China with 145% tariffs on U.S. “Liberation Day.” The actual measures turned out to be softer, but the new plan from the White House has brought the situation full circle. History repeats itself — and sometimes it rhymes.
The latest forecast from the International Energy Agency — a record surplus of 4 million bpd in 2026 — came as a heavy blow to crude prices. The IEA expects global demand to rise by just 700,000 barrels per day in 2025 and 2026, well below historical averages. Meanwhile, OPEC+ plans to restore its market share and will likely continue ramping up output, along with non-OPEC producers such as the U.S., Brazil, Canada, Guyana, and Argentina.
Brent Weekly Trends
Source: Bloomberg.
Compared to September, the surplus estimate has jumped by 18%, sending a clear wave of fear through the Brent market. The North Sea benchmark is on track for its worst weekly streak since March, and major producers and traders are bracing for difficult times. Vitol forecasts that the average Brent price in 2026 will hover around $60 per barrel — roughly at current levels, but 14% lower than the 2025 average.
The surplus is being amplified by record U.S. output. As of the week ending October 10, production climbed to a new all-time high of 13.363 million bpd. Rising inventories signal weakening domestic demand, suggesting that the U.S. economy is cooling — a trend that the trade war could accelerate.
US Oil Production Dynamics
Source: Trading Economics.
The IEA reported a 3.4 million bpd increase in oil on water in September, the largest rise since the pandemic. The real surplus might be even higher, as China continues to conceal its reserve data. Citing Chinese customs, Commerzbank reported that China’s oil imports rose 3.9% year-over-year in September.
Even Donald Trump’s statement urging India to stop buying Russian oil hasn’t spooked the market much. While New Delhi denies the claim, it has requested detailed reports from refineries on their Russian crude imports.
Brent’s downtrend remains in place, but it’s unlikely that prices will fall much deeper. In spring, the U.S. and China quickly reached a deal to reduce tariffs, so they might well repeat that move this autumn. Considering the risk of lower Russian exports and a possible drop in U.S. shale production due to low prices, it makes sense to start looking for a market bottom.
Monthly Trading Plan for Brent
Short positions in Brent opened from around $65 per barrel turned out to be the right move. However, a rebound from $59.3, $57.3, or $53.7 could provide an opportunity to lock in profits and consider reversing the position.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of UKBRENT in real time mode
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