Is Crude Oil Entering a New Bear Phase as Demand Weakens?
Source: Kapitales Research
Highlights:
Crude oil retreated as weakening demand and sharp declines in gasoline and diesel crack spreads pushed sentiment into bearish territory at the time of writing.
The U.S. Energy Information Administration projects that American crude production will climb to a new high of 13.61 million barrels per day this year, and it also anticipates that global oil stockpiles could expand by over 2 million barrels per day in 2026.
Geopolitical comments from President Donald Trump raised concerns that restrictions on Russian oil flows could ease, adding further pressure to global oil prices.
Refined Products Sell-Off Sparks Fresh Pressure on Oil
Crude oil prices slid on Tuesday as sentiment across the energy complex deteriorated, with Australia and New Zealand Banking Group Limited (ASX: ANZ) reporting that weakening demand and sharp declines in refined-product margins are weighing heavily on the market. At the time of writing, Brent Crude Oil was trading near US $62 per barrel, reflecting the shift toward a more bearish tone.
The gasoline crack spread — the profit margin between gasoline and crude — has dropped to its weakest point since February. Diesel crack spreads have also followed the same downward trajectory. This marks a clear reversal from earlier in the year, when strong consumption of gasoline and diesel helped support crude benchmarks.
EIA Outlook Turns More Bearish
The downbeat sentiment was reinforced by the latest projections from the U.S. Energy Information Administration. The agency expects U.S. crude production to hit a record 13.61 million barrels per day this year, despite low pricing and sluggish drilling activity. Looking ahead to 2026, global oil inventories are forecast to build by more than 2 million barrels per day — a signal that supply may significantly outpace demand.
Geopolitical Shifts Add Uncertainty
Geopolitical commentary further unsettled traders. U.S. President Donald Trump said Russia currently holds the stronger position in its conflict with Ukraine and criticised European leaders for “excessive talk.” His remarks triggered concerns that restrictions on Russian oil exports might eventually ease if diplomatic pressure leads to a peace agreement, effectively increasing supply in an already soft market.
What’s Next for Oil Prices?
With refining margins weakening, inventories set to grow, and geopolitical uncertainty rising, analysts warn that crude oil could remain under pressure unless demand rebounds decisively.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au
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Is Crude Oil Entering a New Bear Phase as Demand Weakens?
Highlights:
Refined Products Sell-Off Sparks Fresh Pressure on Oil
Crude oil prices slid on Tuesday as sentiment across the energy complex deteriorated, with Australia and New Zealand Banking Group Limited (ASX: ANZ) reporting that weakening demand and sharp declines in refined-product margins are weighing heavily on the market. At the time of writing, Brent Crude Oil was trading near US $62 per barrel, reflecting the shift toward a more bearish tone.
The gasoline crack spread — the profit margin between gasoline and crude — has dropped to its weakest point since February. Diesel crack spreads have also followed the same downward trajectory. This marks a clear reversal from earlier in the year, when strong consumption of gasoline and diesel helped support crude benchmarks.
EIA Outlook Turns More Bearish
The downbeat sentiment was reinforced by the latest projections from the U.S. Energy Information Administration. The agency expects U.S. crude production to hit a record 13.61 million barrels per day this year, despite low pricing and sluggish drilling activity. Looking ahead to 2026, global oil inventories are forecast to build by more than 2 million barrels per day — a signal that supply may significantly outpace demand.
Geopolitical Shifts Add Uncertainty
Geopolitical commentary further unsettled traders. U.S. President Donald Trump said Russia currently holds the stronger position in its conflict with Ukraine and criticised European leaders for “excessive talk.” His remarks triggered concerns that restrictions on Russian oil exports might eventually ease if diplomatic pressure leads to a peace agreement, effectively increasing supply in an already soft market.
What’s Next for Oil Prices?
With refining margins weakening, inventories set to grow, and geopolitical uncertainty rising, analysts warn that crude oil could remain under pressure unless demand rebounds decisively.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au