Oil Price Outlook: Brent Holds $64, WTI $60 While Greenland Tariff Fight Heats Up

Oil Price Forecast – CL=F and BZ=F Pinned Around $60–$65 in a Surplus-Driven Market

Spot tape for CL=F and BZ=F – range holds near $60 and $65

Front-month WTI crude (CL=F) trades in a tight band around $58–$60, with recent prints near $60.00–$60.36, up about 0.9%–1.6% on the day. Brent (BZ=F) sits higher in its usual premium range, around $64.00–$64.76, gaining roughly 0.8%–1.3%. The spread between BZ=F and CL=F holds near $4–$5 per barrel. Natural gas shows a very different profile, with contracts jumping to roughly $3.83, a +23% daily spike driven by weather, underlining how calm crude is by comparison. The dollar index DX-Y.NYB trades around 98.95, down 0.45, but has recently spiked as high as 104.5 in earlier risk-off phases. That two-way currency action matters for oil because each leg in the dollar either cushions or amplifies moves in CL=F and BZ=F.

Geopolitics: Greenland tariffs and Iran risk reshape the risk premium in **CL=F****

The geopolitical premium in CL=F has shifted from classic Middle East headlines toward an unusual axis: Greenland. The U.S. threat to impose additional 10% tariffs from 1 February on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK, rising to 25% from 1 June if no Greenland deal is reached, has injected a new trade-war layer into the energy tape. For now, analysts judge the direct impact on physical balances as limited, so the immediate effect on CL=F and BZ=F is modest. The move does, however, feed risk aversion in European assets and supports safe-havens like gold, which has ripped to fresh records around the $4,680–$4,750 zone. That safe-haven bid competes with energy for macro capital. On the other flank, Iran risk has cooled. The U.S. has stepped back from direct strikes despite civil unrest, cutting the odds of a sudden export outage in the Gulf. That rollback in Iran risk removes one of the traditional upside levers for CL=F and keeps the geopolitical component of the oil risk premium unusually muted, even as political noise rises.

Macro demand for BZ=F – China’s 5.0% GDP versus a 2.9% global ceiling

On the demand side, the numbers are split between resilience and drag. China’s economy grew 5.0% last year, with Q4 GDP beating expectations and domestic crude output up 1.5% year-over-year. For BZ=F, that matters: China is the top crude importer, and a 5% growth profile underpins baseline demand even in a choppy trade environment. At the global level, the picture is softer. The latest forecasts peg world growth at roughly 2.9% in 2026, a downgrade from earlier projections and a clear slowdown versus pre-COVID norms. Europe and China are cited as weak spots in those revisions. This mix creates a narrow corridor for BZ=F: strong enough Chinese data to stop prices collapsing, but not strong enough global growth to justify a sustained push far above $65–$70.

Dollar swings and refined products – tailwinds and headwinds for **CL=F****

Currency and product markets are quietly steering CL=F. On one hand, a softer dollar patch, with DX-Y.NYB near 98.95, makes crude cheaper for non-U.S. buyers and supports bids around $59–$60. On the other hand, earlier surges in the dollar toward 104.5 tightened financial conditions and capped rallies in energy and other commodities. Refined products add nuance. Diesel prices have pushed higher, improving margins for complex refiners and signalling firm industrial demand. That strength in distillates gives a floor to refinery crude runs and supports physical demand for CL=F and BZ=F, even while macro indicators argue for caution. The combined effect is a market where currency and product trends provide modest support, but not enough to overpower the structural surplus.

Global surplus: supply growth outruns demand for CL=F and **BZ=F****

The core of the story is structural oversupply. Multiple datasets point to global production growth of more than 2 million barrels per day, while demand growth struggles to reach 1 million barrels per day. That net surplus is now embedded in official expectations: crude benchmarks are projected to average around $56 per barrel in 2026, below current levels for both CL=F and BZ=F. Large producers across OPEC+ and non-OPEC regions have lifted output. The U.S., Brazil and Canada continue to add capacity, while some OPEC+ members have only loosely adhered to quotas, with compliance slipping in late 2025. In the U.S., the most recent weekly report showed a surprise build of 2.1 million barrels in crude inventories where the market had pencilled in a draw. That single data point captured the bigger problem: barrels are accumulating faster than they are absorbed. As long as this surplus persists, CL=F near $60 and BZ=F around $64–$65 trade above the medium-term equilibrium implied by the forecasts.

Russia’s Urals discount: fiscal stress at $35–$45 crude versus budget at $59

Russian flows add a separate structural layer to the BZ=F picture. Benchmark Urals crude at Baltic and Black Sea ports traded near $45 per barrel in November, slid to $40 in December, and briefly hit $35 in late December and early January. Recent prints have recovered to $40–$43, but that range still implies a $20–$25 discount versus Brent (BZ=F) around $64–$66. For Moscow’s budget, that is brutal. January oil-and-gas revenues are projected around 420 billion rubles (about $5.42B), a 46% year-on-year collapse. The budget blueprint requires 8.9 trillion rubles (roughly €98.5B) in oil-and-gas revenue for the year, equivalent to around $120B at current assumptions. That already followed a drop from 8.48 trillion rubles (about $110B) and a 24% year-on-year decline the year before. The fiscal model assumes Urals at $59; reality sits closer to $40–$45. At the field level, a full mineral extraction tax of up to $37 per barrel, plus $5 for pipeline transit and about $10 in production cost, means that producers paying full tax are losing money at current prices. Only the three-quarters of companies with preferential tax rates remain profitable. This squeeze raises the probability of renewed lobbying for tax relief, production adjustments, or both. For BZ=F, this matters as a medium-term supply wildcard: deep fiscal stress may force Russia to protect volume at low margins, sustaining global surplus and capping rally attempts.

Russian budget options and the implied floor for CL=F and **BZ=F****

The Russian state has three major levers to plug the oil-driven gap: domestic borrowing, tapping the National Welfare Fund (which holds just over 4 trillion rubles, around €43.8B, in liquid assets), or raising taxes. Borrowing is feasible because government debt is only about 16% of GDP, but higher yields after rate increases make it more expensive. Tax hikes are already on the table: moving VAT from 20% to 22% adds about 1.2 trillion rubles (€13.1B), while other tax tweaks contribute another 500 billion rubles (€5.5B) and recent income-tax changes generated 600 billion rubles (€6.6B). Those measures risk adding 1–2 percentage points to inflation and slowing an economy already near recession. The alternative is to claw back tax breaks from oil and gas producers, which would hit three-quarters of the industry and the major LNG champion. Given that these companies are controlled by figures close to the Kremlin, the outcome is political, not purely economic. For CL=F and BZ=F, this means Russia is incentivised to keep exports flowing even at painful netbacks to defend budget revenue. That stance reinforces the global surplus rather than tightening it.

Trader behavior: fundamentals over headlines in CL=F and **BZ=F****

Price action confirms that traders now prioritize fundamentals over shock headlines. Despite elevated geopolitical noise — Greenland tariffs, Black Sea strikes on tankers, sanctions on major exporters — CL=F has remained pinned below $60–$62, and BZ=F has struggled to clear the mid-$60s. The market has learned that there is ample spare capacity and that supply reroutes around most disruptions. Short bursts of volatility fade as participants refocus on stock levels, production data and growth numbers. Inventory statistics in the U.S. and other OECD hubs, plus OPEC+ guidance, now drive more lasting moves than single geopolitical events. As a result, both CL=F and BZ=F are trading like range instruments rather than trending assets, with most volume concentrated within a $5–$7 band.

Technical structure for CL=F – consolidation between the 50-day EMA and $62

Technically, CL=F is carving out a consolidation zone. The 50-day EMA sits just below current prices and has repeatedly acted as support, matching the recent rebounds from the $58 area. On the upside, the round $60 mark is initial resistance, followed by the $62 zone, which aligns with prior swing highs and psychological supply. Above that range, the 200-day EMA caps the tape and effectively defines the ceiling for now. The pattern is one of compression, with traders unwilling to bid CL=F through the 200-day EMA while the macro surplus persists, but also quick to buy dips near the 50-day EMA. That is classic range-trade behaviour: short at the top of the band, long at the bottom, and flat in the middle.

Technical structure for BZ=F – magnet at $65 with the 200-day EMA as the lid

For BZ=F, the configuration is similar but shifted higher. The 50-day EMA has provided a floor on pullbacks, while $65 acts as a magnet level around which day-to-day trading clusters. The 200-day EMA again serves as resistance, marking the top of the current consolidation zone. With BZ=F around $64.4–$64.8, price is hugging the centre of this structure. Momentum indicators show indecision: neither overbought nor oversold, with no clear directional momentum. The price action signals that traders see little fundamental justification to chase a breakout above the 200-day EMA while EIA forecasts still point to average benchmarks around $56 in 2026.

WTI micro-drivers: U.S. inventories, OPEC+ slippage and CL=F floors

Specific to CL=F, U.S. inventory and OPEC+ discipline define the micro-drivers. The surprise 2.1 million barrel build in U.S. stocks against expectations of a draw shows that the world’s largest consumer has more crude available than anticipated. That single weekly print ties back to the broader theme of oversupply, but it also shapes expectations for U.S. refinery runs and exports. At the same time, OPEC+ compliance drift in December 2025 – with some members producing above target – undermines the cartel’s ability to engineer a tight market. If the group wants to push CL=F decisively above $62–$65, it would need a fresh, credible cut rather than soft jawboning. Until then, the market sees each dip toward the high-$50s as an opportunity for refiners and physical buyers, and each spike toward the 200-day EMA as a chance for producers and hedgers to lock in forward prices.

Brent micro-drivers: European demand, Russian discounts and BZ=F spreads

For BZ=F, Europe’s demand profile and Russian discounts are critical. European crude imports fell through 2025, while sanctions and shipping risks pushed Russian Urals into shadow routes and steep discounts. The $20–$25 spread between Brent and Urals around $64–$66 versus $40–$45 avoids a physical shortage in Europe by incentivising traders to arbitrage barrels through third countries. That flow keeps BZ=F from spiking, even when incidents occur in the Black Sea or at Russian ports. At the same time, tariff threats over Greenland risk slowing European growth further, which leans against demand for BZ=F. The net result is a benchmark that trades as a mild premium to CL=F, but cannot detach meaningfully from the global surplus narrative.

Scenario map for CL=F and BZ=F – what breaks the $60–$65 range?

For CL=F and BZ=F, the path out of the current band is clear but conditional. On the upside, a genuine supply shock would be needed: a large, sustained outage from a major producer, a credible and deep new cut from OPEC+, or unexpectedly strong demand from China, India or the U.S. that absorbs the surplus faster than current forecasts. A weaker dollar trend, with DX-Y.NYB sliding decisively below the high-90s, would amplify any of those catalysts by making crude cheaper for non-U.S. buyers. That combination could push CL=F toward the mid-$60s and BZ=F toward $70+. On the downside, escalation in trade wars — specifically a full-blown U.S.–EU tariff conflict tied to Greenland — would hit growth expectations and fuel demand simultaneously. Additional bearish drivers would be larger-than-expected inventory builds, further downward revisions of global growth below 2.9%, or more evidence that cleaner technologies are capping medium-term hydrocarbon demand. Under that mix, CL=F could retest the low-$50s, with BZ=F sliding into the high-$50s despite sporadic geopolitical scares.

Verdict on CL=F and BZ=F around $60–$65 – Buy, Sell or Hold?

With WTI (CL=F) sitting around $58–$60, Brent (BZ=F) near $64–$65, global supply growing more than 2 million bpd, demand growth stuck below 1 million bpd, official 2026 benchmarks projected near $56, U.S. inventories surprising to the upside by 2.1 million barrels, Russia forced to sell Urals near $40–$45 against a $59 budget assumption, and macro growth capped near 2.9%, the balance of evidence is not bullish. At the same time, repeated defences of the 50-day EMA in both contracts and a visible floor around $58 for CL=F argue against an aggressive collapse without a fresh macro shock. Taking all numbers together, the stance is clear: CL=F and BZ=F at $60–$65 are a SELL on medium-term horizon with a bearish bias, with better risk/reward on rallies into the 200-day EMA than at current levels. Dips into the low $50s in CL=F and high $50s in BZ=F would be the zones where a tactical BUY becomes interesting again. Until the surplus shrinks or growth re-accelerates, the data favor selling strength rather than chasing upside in oil.

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