Major financial institutions are sounding the alarm on crude markets heading into next year. Analysts across several Wall Street desks are projecting a significant oil surplus could materialize in 2026, with production outpacing demand growth.

The outlook stems from a confluence of factors: OPEC+ production increases coming back online, resilient U.S. shale output, and slower-than-anticipated demand recovery in key economies. Some forecasts suggest the glut could pressure prices substantially if current trajectories hold.

For macro traders and risk asset allocators, this matters beyond energy portfolios. Persistent low oil prices typically signal deflationary pressures or weak economic momentum—both scenarios that historically influence central bank policy and broader market sentiment. Worth monitoring how this develops as we approach mid-decade.