FX.co ★ Oil Set for Largest Yearly Decline in 5 Years

As 2025 drew to a close, West Texas Intermediate (WTI) crude oil futures remained steady at $57.9 per barrel, marking the most significant annual downturn since 2020 due to concerns about an oversupply. Investors are closely watching for outcomes from the forthcoming OPEC+ meeting, geopolitical shifts, and the latest U.S. inventory reports. When OPEC+ convenes on Sunday, it is anticipated to uphold its decision to halt any supply increases during the first quarter of 2026. Geopolitical issues continue to bolster prices, with factors such as the U.S. blockade of Venezuelan oil exports, new unrest in the Middle East, and persistent uncertainties regarding a Russia-Ukraine peace agreement playing pivotal roles. Coinciding with these developments, the American Petroleum Institute (API) has projected a rise in U.S. crude stockpiles by 1.7 million barrels in the past week, which, if confirmed, would represent the largest increase since the middle of November. WTI has experienced a 1% decline so far in December, is on course for its fifth consecutive monthly loss, and has seen a near 20% drop throughout the year. The anticipation of a substantial excess, amid increased production from both OPEC+ and non-OPEC producers alongside sluggish demand growth, has been a key factor in the gradual depreciation of oil prices throughout 2025.