Oil Inches Up After Posting Biggest Annual Loss Since 2020
By Naija Enquirer Staff
Oil prices edged higher on the first day of trading in 2026, rebounding slightly after recording their deepest annual loss since 2020, as fresh geopolitical tensions helped counter persistent concerns over global oversupply.
Brent crude futures rose by 42 cents to $61.27 a barrel as of 0714 GMT on Friday, while U.S. West Texas Intermediate (WTI) crude also gained 42 cents to trade at $57.84 a barrel.
The modest recovery followed a turbulent 2025 in which both global benchmarks suffered losses of nearly 20 percent, driven largely by excess supply, slowing demand growth and investor uncertainty around tariffs and production policies.
Geopolitical developments provided some support to prices. Ukrainian drones reportedly targeted Russian oil facilities, while the United States stepped up pressure on Venezuela’s oil sector through new sanctions imposed on four companies and associated tankers.
Russia and Ukraine also traded accusations of civilian attacks on New Year’s Day, despite ongoing talks overseen by U.S. President Donald Trump aimed at ending the nearly four-year conflict. Kyiv has intensified strikes on Russian energy infrastructure in recent months, seeking to limit Moscow’s revenue streams.
In the Middle East, tensions between key OPEC producers Saudi Arabia and the United Arab Emirates deepened over developments in Yemen, with flights suspended at Aden’s airport ahead of a virtual OPEC+ meeting scheduled for January 4.
Market participants broadly expect OPEC+ to maintain its pause on output increases in the first quarter of the year. According to June Goh, senior analyst at Sparta Commodities, 2026 will be critical for assessing how OPEC+ balances supply amid uncertain demand conditions.
Analysts also point to China’s continued crude stockpiling in the first half of the year as a factor that could help put a floor under prices.
Despite the early-year uptick, sentiment remains cautious. DBS energy analyst Suvro Sarkar described the outlook as largely range-bound, with Brent expected to trade between $60 and $65 per barrel. He noted that geopolitical flare-ups are currently generating only short-lived price reactions.
U.S. production remains a key pressure point. Data from the Energy Information Administration showed that oil output reached a record 13.87 million barrels per day in October. While crude inventories declined last week, gasoline and distillate stocks rose amid strong refining activity.
Analysts say the tug-of-war between geopolitical risk and oversupply is likely to persist, keeping oil markets volatile but largely constrained in the early months of 2026.
