By Irina Slav – Feb 24, 2026, 12:39 AM CST
The risk of global oil oversupply is diminishing thanks to demand resilience, Diamondback Energy said in a letter to shareholders authored by the company’s chief executive ahead of the company’s fourth-quarter 2025 financial report, due out later today.
“The wave of oversupply that has been widely telegraphed for the better part of the last two years continues to get pushed to the right – at some point the market will slowly begin to find reasons to be less bearish as demand is strong and the global economy is growing,” Kaes Van’t Hof wrote.
The top executive noted, however, that the balance between supply and demand in oil was still rather unfavorable for the industry, referring to the macro environment as “yellow-light” scenario. That scenario is an improvement of what Diamondback referred to as “red-light” scenario, which was dominant over the last three quarters of 2025. As a result, Diamondback planned to keep production steady rather than investing in growth for the time being.
Oil prices have been on a climb this year, but mostly on the back of geopolitical developments, the latest among these being the threat of a hot war between the United States and Iran. That threat pushed Brent over $72 earlier this week, with the benchmark at $71.95 as of earlier today, while West Texas Intermediate was trading at $66.76 per barrel at the time of writing.
Yet it seems that the belief in a major oil glut is becoming shakier than before. “The shape of the ICE Brent forward curve continues to suggest that the market is tighter than what many analysts have been expecting, including us,” ING’s commodity strategists Warren Patterson and Ewa Manthey said in a recent note.
Goldman Sachs, in turn, revised its oil price forecast for the end of 2026, citing lower-than-expected oil inventories in the members of the OECD. The Wall Street bank lifted its Q4 2026 price estimate by $6 to $60 per barrel Brent crude and made the same upward revision of its WTI Crude price outlook, to $56 per barrel at year-end.
By Irina Slav for Oilprice.com
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Irina Slav
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
