Oil Price Forecast: WTI Oil Breaks Out Toward $62 as Brent Jumps Above $66 on Geopolitical Risk

Oil Price Crossroads: WTI (CL=F) Breakout, Brent (BZ=F) Strength and Regional Spreads

Oil is trading in a classic tension zone: technically broken out, fundamentally still capped by oversupply and politics. Front-month WTI sits around $61.5–$62.0, up roughly 11.8% off the December low at $54.98 and testing its first serious resistance band since the five-month downtrend from July broke. Brent is quoted near $66.06, with March futures last dealt around $68.57, and the spread to WTI hovering in the mid-single digits. Regional grades reflect the same risk-premium story: Azerbaijan’s Azeri LT CIF has jumped $3.21, or 4.68%, to $71.75 per barrel, while FOB Ceyhan barrels have climbed $3.19 to $69.62, comfortably above the $65 level baked into Azerbaijan’s 2026 state budget.

WTI (CL=F) Technical Structure: 11.8% Rally Into 61.43–62.05 Resistance

The WTI chart has flipped from persistent bleed to sharp repair, but the first real test is exactly where price is sitting. From the December trough at $54.98, futures have rallied more than 11.8%, breaking a multi-month downtrend drawn off the late-July highs. That break signals that the old bearish structure has been invalidated and a more durable low around $55 is at least plausible.

On the daily view, the key cluster is $61.43–$62.05. That band is defined by the April 2025 low-week close, the September low, the 61.8% retracement of the September downswing, and the 100% extension of the late-December impulse. Price is effectively boxed between that ceiling and the first retracement support around $59.33. A clean daily close above $62.05 would confirm that the breakout has transitioned from short squeeze to trend, opening the door toward the 200-day moving average near $62.36 and then the October high at $62.90.

If CL=F fails here, the downside ladder is very clear. Initial support sits at $59.33, followed by the weekly low at $58.44. The tactical line in the sand for the new bullish structure is the yearly open at $57.58, where the lower boundary of the current ascending pitchfork also converges early next week. A daily close below $57.58 would say the December low at $54.98 and the broader 54.36–55.10 zone (61.8% extension of the 2022 decline plus the 2016 high and 2025 swing low) are back in play, and that the bear trend may not be finished.

Short-Term Tape in WTI: 60.50 Break, Trendline Support and a 66.00 Upside Magnet

On the shorter-timeframe WTI futures chart, the momentum structure leans bullish but fragile. Price has broken out of a falling channel and then cleared a key swing pivot around $60.50, which had capped rallies previously. That move unlocked the current run toward the $66.00 region, which is the next obvious objective if the risk premium from geopolitical tensions persists.

Intraday, buyers are defending an upward trendline that has governed the entire advance from the December low. As long as CL=F trades above that trendline and holds the $60.50 breakout level on pullbacks, the path of least resistance remains higher, with $62.00, $62.90, then the 64.52–65.25 band (38.2% retracement of the 2025 range plus the 2024 swing low) as sequential targets.

If that trendline breaks decisively and WTI closes back below $60.50, the market will likely rotate toward the $58.80–$59.33 support pocket, where dip-buyers will have to prove that this is a trend transition rather than another failed spike in a longer bear market.

Brent (BZ=F) and Azeri LT: Risk Premium and the Azerbaijan $65 Budget Anchor

On the seaborne side, Brent at $66.06 with nearby futures at $68.57 reflects a premium both to WTI and to the fiscal assumptions of key regional producers. Azerbaijan’s flagship Azeri LT CIF grade at $71.75 has jumped $3.21 in a single move, or 4.68%, while FOB Ceyhan pricing at $69.62 is up $3.19, or 4.8%. Those levels sit roughly $6–$7 above the $65 oil price embedded in Baku’s 2026 budget.

That spread matters. At $71.75, Azeri LT is not remotely close to the extremes of the past—$15.81 at the April 21, 2020 collapse and $149.66 at the July 2008 peak—but it does hand Azerbaijan a cushion versus its fiscal baseline while keeping global benchmark BZ=F under the psychologically important $70–$75 band.

The WTI–Brent spread near $4–$6 also signals that quality and freight differentials are behaving normally: U.S. light sweet remains slightly discounted, Azeri and other premium grades trade above BZ=F, and none of the spreads are screaming structural shortage. The pricing of Azeri LT a full $10 above WTI is a clean readout of risk premium on high-quality seaborne barrels rather than a genuine collapse in supply.

Venezuelan Heavy Oil and U.S. Gulf Refineries: Limited Near-Term Shock for Oil

The political drama around Venezuela is noisy, but the barrels themselves are modest in scale relative to the global Oil market. After decades of mismanagement, sanctions and asset stripping, national production has sagged from roughly 3.5 million barrels per day in 1997 to about 840,000 barrels per day by 2025. Estimates suggest that without major capital, output can only creep toward ~1.0 million barrels a day by 2027. Even with as much as $20 billion in new investment, some analysts see a cap near 1.5 million barrels a day in the medium term, and most of that is very heavy crude requiring expensive upgrading.

The recent headlines around U.S. seizure of Venezuelan cargos and talk of redirecting 30–50 million barrels “to benefit the people” amount to roughly two to three days of U.S. oil production or one to two months of current Venezuelan output. For context, U.S. exports of refined products alone are running around 7.7 million barrels per day. That scale makes clear why the immediate impact on WTI or BZ=F pricing is limited.

U.S. Gulf Coast refiners like Chevron, Valero and Phillips 66 have long specialized in running heavy sour crude, including Venezuelan grades, but their capacity for heavy barrels is finite and much of it is covered by long-term supply contracts. Some Venezuelan barrels can be swapped in and monetized through refined product exports or storage, but the system cannot absorb an unlimited wave of heavy crude overnight.

Longer term, if Venezuelan production genuinely recovers alongside expansions in Libya, Iraq and the United Arab Emirates, the real risk is not a shortage but another oversupplied cycle. The last time Caracas aggressively ramped production in the 1990s, benchmark oil prices briefly slipped below $10 per barrel. That history hangs over any 10-year outlook for Oil, even if today’s marginal barrels are far more expensive to develop.

India’s Crude Pivot: IOC, Ecuador, Colombia and the Repricing of Sour Oil

The re-routing of flows through Asia is another structural piece investors in CL=F and BZ=F cannot ignore. India’s largest state refiner, Indian Oil Corporation, is now sourcing crude from as far as South America to plug gaps left by sanctions on Russia’s major producers. The firm has just bought its first 2 million-barrel cargo of Ecuador’s medium-heavy Oriente crude for late-March delivery, on top of its first Colombian cargo secured under an optional supply agreement with Ecopetrol.

This comes after IOC reportedly bought five Russian cargoes from non-sanctioned intermediaries for December arrival. That patchwork reflects how dramatically India’s slate has shifted: since early 2022, the country is estimated to have imported around $168 billion worth of Russian crude, effectively acting as a key buyer of discounted Urals and other grades. New sanctions have forced refiners to diversify again, raising freight distances and nudging up delivered costs for medium and heavy sour barrels into Asia.

For benchmarks, this matters in two ways. First, incremental demand for non-Russian medium-heavy barrels supports differentials for grades like Mars US (around $70.06) and some West African and Latin American blends relative to WTI. Second, as Indian refiners bid further afield, price signals from BZ=F and regional markers like Azeri LT are more tightly linked to U.S. foreign policy and sanctions risk than to pure supply-demand arithmetic. That linkage can elevate volatility in Oil futures even if global balances remain comfortable.

Geopolitical Premium: Iran Protests, U.S. Threats and the Oil Risk Bid

The latest leg of the WTI rally is not driven by inventory draws or demand surprises; it is mainly a repricing of geopolitical risk. Protests in Iran and explicit threats of “help” from Washington have shifted traders’ focus from Venezuela to the Persian Gulf, where any disruption can swing Oil by several dollars in a single session.

A U.S. president cancelling talks with Iranian officials and signaling that “you are going to have to figure it out” regarding planned support is exactly the type of open-ended rhetoric that pushes risk models to add a premium. As those headlines hit, WTI punched through the falling channel top and through the $60.50 cap, accelerating toward the current $61.5–$62 zone.

For now, the market is trading a scenario where tension escalates but does not remove large volumes from the market. If signals shift toward direct strikes on infrastructure or shipping lanes, CL=F could overshoot the 64.52–65.25 zone and test $66.00 and above purely on fear. Conversely, if the rhetoric cools and no physical disruption materializes, a chunk of that premium can disappear quickly, dragging WTI back toward high-$50s even without any change in fundamentals.

Fundamental Balance: Oversupply, OPEC Politics and Long-Cycle Pressure on Oil

Behind the headline-driven spikes, the fundamental backdrop remains skewed toward adequate supply. Global Oil markets are currently oversupplied enough that even with Venezuelan exports disrupted temporarily, prices stayed anchored in the $55–$70 band rather than revisiting triple-digit territory. China is still importing around 11 million barrels per day, with 500,000–600,000 barrels per day historically sourced from Venezuela, but has no shortage of alternative suppliers, including Russia, the Middle East and West Africa.

Within OPEC and its allies, tension between capacity expansion and quota discipline continues. The UAE has been adding capacity and lobbying to raise its official production baseline, while countries like Libya and Iraq harbor ambitions to increase output as their own infrastructure and politics allow. If Venezuela manages to claw back volumes and these producers add barrels into a world where demand growth is flattening, the medium-term risk for BZ=F and CL=F is persistent ceiling pressure rather than scarcity.

The precedent is clear: in the late 1990s, a combination of new capacity and demand shocks drove benchmark prices below $10 per barrel. Few analysts expect a repeat of that magnitude given higher marginal costs and rising fiscal break-evens, but the direction of structural risk—more supply capacity chasing plateauing demand—argues against a sustained break far above the current $60–$70 range without a major geopolitical shock.

Key Trading Levels for WTI (CL=F) and Brent (BZ=F)

For WTI, the immediate battlefield is tightly defined. Resistance sits at $61.43–$62.05, with the 200-day moving average around $62.36 and the October high at $62.90 just above. A sustained close through those levels would open up the 64.52–65.25 band, where the 38.2% retracement of the 2025 range clusters with the 2024 swing low. Beyond that, the geopolitical-headline target near $66.00, flagged by the channel breakout projections, becomes realistic.

On the downside, $59.33 is the first place where dip-buyers must show up; below that, $58.44 marks last week’s low, and $57.58—the yearly open and lower pitchfork boundary—is the critical pivot for the entire recovery from $54.98. Lose $57.58 on a daily close and the market will start to price in a retest of 56.37/56.50 and then the heavyweight support band at 54.36–55.10, where longer-term funds will reassess structural longs.

For Brent, spot around $66.06 and futures near $68.57 place the benchmark below obvious psychological resistance but clearly above recent stress levels. If risk premium persists, moves through $70 and toward mid-$70s would not require a dramatic shift in fundamentals, merely more escalation in Iran or further attacks on infrastructure in sensitive regions. If tensions ease and Venezuelan and Russian logistics stabilize, BZ=F has room to gravitate back toward the low-$60s, with the WTI–Brent spread compressing.

Positioning Verdict: Oil Is a Hold With a Short-Term Bearish Skew

Forced to choose between buy, sell and hold at current levels, WTI (CL=F) is a Hold with a bearish tactical bias, and Brent (BZ=F) sits in the same camp.

Into $61.5–$62.0 on WTI and ~$66 on Brent, the market is paying for: an 11.8% rebound off the December low, a clean technical breakout through the July downtrend, a layered geopolitical premium from Iran, and modest structural tightness in specific seaborne grades like Azeri LT at $71.75. At the same time, the data show: a still-oversupplied global Oil market, Venezuelan capacity too small and too slow to change the balance near term, India and China able to reshuffle flows rather than bid prices into a panic, and OPEC members quietly adding capacity behind the scenes.

That mix justifies current prices in the low-$60s for CL=F and mid-$60s for BZ=F, but it does not justify chasing a breakout aggressively higher unless Iran headlines move from threats into concrete supply losses. For directional positioning, upside from here toward 64.5–66.0 on WTI looks narrower than the downside back toward 59–57, and ultimately 55, if the risk premium fades.

From an investor’s perspective, Oil here is not cheap enough to buy blindly, nor structurally overvalued enough to call an outright long-term sell. It is a range market with geopolitics driving the top of the band and oversupply defending the bottom. That argues for a Hold on core exposure, opportunistic selling of WTI rallies closer to 64.5–66.0, and fresh buying interest only if the tape hands back a significant part of the recent 11.8% rebound and re-tests the 55–57 support zone without a collapse in demand.

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