Crude prices started the holiday-shortened trade week higher but slipped by week’s end despite at least three ongoing geopolitical risks while a third has emerged. A large draw in oil feedstocks was offset by even larger gains in refined product inventory. The $60.00/bbl level was broken Dec. 8, 2025, and hasn’t been reached since.
WTI’s weekly high of $58.55/bbl occurred Wednesday while the low of $56.60 was on Friday. Brent followed a similar pattern but hit its high of $63.30/bbl on Tuesday with its weekly low of $60.00 also on Friday. WTI settled higher vs. last week while Brent was higher. The WTI/Brent spread has tightened to ($3.60). Oil prices ended 2025 19% lower year-over-year representing the largest annual slide percentage-wise since 2020 and the third straight year of decline.
There appears to be no progress in the Russia/Ukraine peace process as Ukraine continues to attack key Russian oil infrastructure while Russian President Putin made a false claim of an attack on one of his many vacation homes while on a call with US President Trump.
Meanwhile, the US CIA reportedly attacked an onshore Venezuelan oil plant, putting more pressure on Maduro. The US has also imposed more sanctions on Venezuelan tankers which now include some ULCCs. Additionally, tensions are rising between the UAE and Saudi Arabia as each country’s proxies are clashing in Yemen with a recent strike at an oil port increasing export risk.
Adding more uncertainty, Pres. Trump, in an early morning social media post, expressed outrage at the suppression of Iranian protestors in Tehran and hinted at possible action to protect them.
This quadrupling of geopolitical risk directly involves global oil supplies coming from 4 different countries, yet those clinging to a bearish outlook have dominated the market this week as the International Energy Agency (IEA) is projecting a surplus of as much as 4.0 million b/d. However, OPEC still sees a more balanced market this year and is holding output levels for the first quarter. The OPEC+ group will meet this weekend but there are no expectations of any change in current policy.
The latest Dallas Federal Reserve survey of oil and gas executives indicated 2026 upstream capital spending would range from “decrease slightly” (19%) to “increase slightly” (26%) depending on the size of the firm. Oil and gas service companies were more pessimistic, with 48% expecting a decrease in spending based upon a lower level of activity.
The Energy Information Administration (EIA)’s Weekly Petroleum Status Report indicated total US oil production was steady at 13.8 million b/d vs. 13.6 last year at this time while the Strategic Petroleum Reserve (SPR) was up 250,000 bbl. to 413 million bbl.
The New Year has started off on a roller coaster for stocks as the Dow is higher this week while the S&P and NASDAQ are lower. There were lower claims for unemployment last week, but Pres. Trump’s on-again/off-again tariff strategies are creating mixed signals for investors. The President recently threatened to increase tariffs on the EU while postponing import tariffs on furniture and cabinetry for a year. Meanwhile, the Fed does not seem poised to initiate another rate cut this month when it meets. The USD is higher which is also aiding in suppressing crude prices.
Oil, technical analysis