The world has more oil than it needs, but a drop in crude prices this week to the lowest level in nearly five years may help slow production and boost demand.

Investment banks and the U.S. Energy Information Administration forecast a significant oil market oversupply in 2026, driven by weak demand and rising production, predicting average crude prices will drop below $60 per barrel.

Christof Ruehl, Global Advisor at Crystol Energy, believes OPEC can tolerate oil prices in the mid-$50s and that any decision to cut output would be driven by politics rather than price levels.

"The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear," one survey respondent said. "The oil industry is once again going to lose valuable employees."

Canadian oil sands producers lead by Cenovus Energy Inc. plan to expand production next year despite an impending supply glut that threatens to deepen the slump in crude prices. All four of Canada’s biggest oil companies including Cenovus,

Wall Street watched the major market averages slide on Wednesday as investor attention moved towards the energy sector and the jump up in oil prices. The blue-chip Dow Jones Industrial Average (DJI) was last higher by 0.

Stocks and oil prices are telling very different stories about the U.S. economy — but history suggests that equities tend to see better-than-average returns in the periods that follow such divergence.