WTI Ends 20% Lower For The Year As Even Worse Prospects Forecast For 2026

Meanwhile, Russia claims impending victory in its war against Ukraine: File Image/Pizabay

As anticipated for over a week now, oil on the last day of 2025 hurtled towards the dismal distinction of suffering its worst year since the onset of the Covid lockdowns, with West Texas Intermediate down nearly 20 percent for the year.

WTI hovered at $58 per barrel on Wednesday as traders kept an eye on U.S. president Donald Trump's stance on Russia/Ukraine, Venezuela, and Iran – but whose mindset was firmly fixed on the expectation that the New Year would herald global production far exceeding demand.

For the record, the International Energy Agency and Washington predict production will exceed consumption by just over 2 million barrels per day (bpd) when the numbers are tallied for 2025, and that the surplus will worsen in the months to come.

Kaynat Chainwala, an analyst at Kotak Securities Ltd., said prices should stay range-bound between $50 and $70, "with strong non-OPEC production from the U.S., Brazil, Guyana and Argentina outpacing uneven global demand."

Warren Patterson, the head of commodities strategy at ING, earlier wrote that "What's really stood out in oil markets this year is the lack of volatility, particularly given the myriad geopolitical events and supply risks," and he attributed this in part to fatigue over seemingly endless geopolitical tensions.

Adding to Wednesday's gloom was the U.S. Energy Information Administration, which reported  that U.S. crude oil imports last week fell to 4.9 million bpd, the lowest since February 2021; also, oil imports from Mexico fell to 71,000 bpd in the week to Dec 26, the lowest on record, according to EIA data.

The EIA earlier reported that gasoline inventories saw another increase, gaining 6.2 million barrels in the week ending December 26; and distillates rose by 1 million barrels during the same time frame.

Meanwhile, if Patterson's theory about geopolitical fatigue proves true, then oil will remain range bound in the early days of the New Year based on the most pragmatic view about the efficacy of the Russia/Ukraine peace talks, which on Wednesday saw Russian president Vladimir Putin during his New Year's address vowing victory in the four-year war, praising Russian soldiers, and describing the war as a struggle for Russia's homeland.

Seperately, Dmitry Medvedev, Putin's security council deputy, told media of victory in Ukraine, "I sincerely believe that it is near."