The Most Boring Oil Month in Years Sets the Stage for a High-Stakes December

CL=F +0.80% XOM +2.10% TTE +1.86% TTFNF -0.03% B -1.29%

After a month where every geopolitical bet fizzled, the oil market enters December searching for its next catalyst.

2026 Forecasts Slide to $62 as Oversupply Clouds Outlook

- The oil markets are increasingly forming a consensus view on 2026 prices, with a Reuters survey of analysts and economists yielding a $62 per barrel average for next year, a whopping $10 per barrel lower than their initial 2026 predictions.- The IEA’s expectations of a 4.2 million b/d oversupply is the most extreme outlook, perhaps overtly biased; however, even the most conservative estimate puts the total stock-build in 2026 at 0.5 million b/d. - US shale output starting to decline next year - with WTI projected to average $59 per barrel, some $3-4 below the breakeven cost of a new Permian well  – should put a floor under prices, so steeper price slumps are considered less likely. - High freight costs have so far restricted the flood of Atlantic Basin barrels into Asia; however, with the Brent-Dubai EFS spread now trading negative, it is only a matter of time when easing freight costs open up those floodgates.  - ICE Brent front-month futures have averaged $68.80 per barrel in January-November 2025, a more than $11 per barrel drop compared to the 2024 average.

Market Movers

- US oil major Chevron (NYSE:CVX) will farm into two oil and gas exploration blocks in Nigeria’s deepwater operated by France’s TotalEnergies (NYSE:TTE), covering 2,000 km2 in the West Delta Basin.

- US pipeline operator Targa Resources (NYSE:TRGP) agreed to purchase Stakeholder Midstream for $1.25 billion in an all-cash transaction, boosting its natural gas processing portfolio.

- UK energy firm BP (NYSE:BP) has fully restarted its Olympic Pipeline system connecting the northwestern states of the US, following an almost month-long halt due to a leak.

- US oil major ExxonMobil (NYSE:XOM) has been approached by Iraqi authorities to express its interest in buying Lukoil’s 75% stake in the West Qurna-2 project, having only divested its equity in the neighbouring West Qurna-1 two years ago.

- Gold-focused mining giant Barrick Mining (NYSE:B) is considering an initial public offering of its North American gold assets, moving towards a spin-off of its Nevada gold mines under pressure from activist investor Elliott Investment Management.

Tuesday, December 02, 2025

The disappointing tug-of-war between oil doomers that anticipated a rapid return of Russian supply to markets after a quick Russia-Ukraine peace deal and the remaining oil bulls expecting military action in Venezuela has ultimately led to November going down as one of the most boring months in recent history, with ICE Brent trading within a $3-per-barrel trading range all month ($62.48 to $65.16). As the OPEC+ meeting brought exactly what the markets expected, all eyes are now on the Witkoff-led shuttle diplomacy between Moscow and Kyiv that could tilt the balance in December.

OPEC+ Rolls Over December Quotas. As assumed, OPEC+ members agreed to keep production levels unchanged for Q1 2026 as the group acknowledged oversupply risks amidst slackening demand, whilst also approving an internal mechanism to assess countries’ production capacity for 2027.

Henry Hub Hits 3-Year High on LNG Demand. US natural gas futures jumped to a 35-month high this week, at $4.9 per MMbtu, as the country’s feedgas demand continues to climb after a record 18.2 Bcf/d in November, with forecasts of below-average temperatures adding to the bullish sentiment.

Related: Tripoli and Algiers Push New Oil Cooperation After Ghadames Discovery

Copper Booms as China Announces Smelting Cuts. Copper prices in China, traded on the Shanghai Futures Exchange, rose to an all-time high of ¥89,650 per metric tonne ($12,650/mt) after CSPT, one of the country’s largest smelters, agreed to cut production by more than 10% in 2026.

CPC Resumes Loading After Drone Attack. The Caspian Pipeline Consortium, Kazakhstan’s main export conduit, has resumed oil loadings on Monday after a Nov 29 Ukrainian drone attack damaged its single-point mooring No.2, however shipments are currently only running at 50% capacity.

UK Pulls Out of Key African LNG Project. The British government has pulled its $1.15 billion financial backing for the TotalEnergies-operated (NYSE:TTE) Mozambique LNG project, a month after the plant’s 4-year force majeure was lifted, citing high security risks and shifting government priorities.

Gunvor Founder Quits Global Trader. Geneva-based commodities trader Gunvor announced that its co-founder and majority owner Torbjorn Tornqvist will retire as its chief executive and sell his stake after US allegations of him being a ‘Kremlin puppet’, launching a ‘definitive reset’ for the company.

Senegal Struggles to Contain Tanker Leak. The African country of Senegal is scrambling to prevent an oil leak from the Mersin oil products tanker, attacked last week in what Moscow alleges was a Ukraine-orchestrated drone attack, as the blasts resulted in seawater ingress into the engine room.

Elliott Gets the Final Approval for Citgo Deal. A Delaware court authorized the sales of shares in PDVSA-owned refining giant Citgo Petroleum to Amber Energy, an arm of activist investor Elliott Investment Management, for $5.9 billion, the last legal step in a two-year auctioning process.

Venezuela Warns of US Eyeing Its Reserves. Venezuela’s President Nicolas Maduro has accused the Trump administration of seeking to take over the country’s 300-billion-barrel oil reserves after imposing an airspace blockade on November 29, appealing to OPEC members for support.Taiwan Doubles Down on LNG Usage. Taiwan published official energy consumption statistics for October, showing that LNG accounted for 53% of the country’s power generation mix for the first time ever, with Taipei boosting gas imports as it shut down its last nuclear reactor in Maanshan.

Black Sea Insurance Rates Soar on Drone Strikes. Ukraine’s drone strikes on tankers carrying Russian oil and dry bulk goods, with two confirmed hits in Turkish waters, have lifted insurance rates in the Black Sea as Russian loadings now wield a rate of 0.8% of ship value compared to 0.6% last week.

Canada Delays Decision on TMX Asset Sale. Canada’s Carney government stated that it would only look at selling equity in the state-run $24 billion Trans Mountain oil pipeline after it is fully utilized, as tariff toll disputes are still keeping throughput rates at 75% of nameplate capacity.China Pitches Iron Ore Expansion for Miners. China’s Iron and Steel Association has urged domestic mining companies to expedite iron ore mining projects in the country as its import dependence has been soaring, taking in more than 1 billion tonnes last year or 70% of its overall requirements.

By Tom Kool for Oilprice.com

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