Oil slips on first trading day of 2026 on oversupply fears
Oil prices slipped on the first trading day of 2026 amid oversupply worries after crude posted its worst annual loss since 2020; OPEC+ meets Jan 4
Global oil prices edged lower on the first trading day of 2026, extending a weak tone after crude’s worst annual performance since 2020, as investors remained focused on concerns over an oversupplied market alongside geopolitical risks.
On Friday, January 2, Brent crude for March delivery fell 10 cents, or 0.16%, to settle at US$60.75 a barrel. US West Texas Intermediate (WTI) slipped 10 cents, or 0.17%, to US$57.32 a barrel.
Markets are weighing supply concerns against geopolitical developments, including the war in Ukraine and issues linked to Venezuelan exports. Russia and Ukraine accused each other of attacking civilians on New Year’s Day, despite talks under the watch of US President Donald Trump aimed at ending the war, now approaching four years. Ukraine has stepped up attacks on Russia’s energy infrastructure in an effort to cut funding for Moscow’s military campaign.
In Venezuela, the Trump administration increased pressure on President Nicolás Maduro on Wednesday by imposing sanctions on four companies and oil tankers it said operate in Venezuela’s oil sector. Maduro, in a New Year message, said Venezuela would welcome US investment in its oil industry, cooperate in combating narcotics, and pursue serious talks with Washington.
Trump also warned he would support protesters in Iran if Iranian forces fired on them, as unrest in recent days posed one of the most serious internal challenges to Iran’s authorities in years.
Despite such risks, analysts said the market response remained muted. Phil Flynn, a senior analyst at Price Futures Group, said oil prices appear locked within a long-term trading range, with a prevailing view that supply will remain adequate regardless of developments.
In the Middle East, tensions between Saudi Arabia and the United Arab Emirates—both major OPEC producers—linked to Yemen escalated after flights were suspended at Aden airport on Thursday.
OPEC+ is scheduled to meet on Sunday, January 4. June Goh, an analyst at Sparta Commodities, said most traders expect the group will continue to delay planned production increases in the first quarter.
She said 2026 will be an important year for assessing OPEC+ decisions in balancing supply. She added that China is expected to continue building crude oil reserves in the first half of the year, which could help support prices.
Brent and WTI fell nearly 20% in 2025, marking the biggest annual decline since 2020. It was also the third consecutive year of losses for Brent, described as the longest such stretch on record.
Priyanka Sachdeva, an analyst at Phillip Nova, said the relatively small price moves reflect a tug-of-war between near-term geopolitical risks and longer-term fundamentals pointing towards an oversupplied market.
