Oil Opens 2026 With A Risk Premium, While Surplus Fears Still Dominate

Key Points

1. Brent near $61.2 and WTI near $57.7 kept the spread around $3.4.
2. Russia strikes, Venezuela enforcement, and Caspian bottlenecks lifted prices into the Jan. 4 OPEC+ meeting.
3. Momentum signals were neutral, reinforcing a range market.

Brent traded near $61.2 and WTI near $57.7 as supply-risk headlines returned. Ukrainian drones struck Russia’s Ilskiy oil refinery in Krasnodar and an energy storage facility in Tatarstan.

Venezuela tightened. Tighter U.S. enforcement and new sanctions targeting firms and vessels tied to Venezuelan oil coincided with reports that December exports fell to roughly half November’s pace, as PDVSA used floating storage, faced slower loadings after a cyberattack, and widened discounts.

The Caspian added a hard constraint. The Caspian Pipeline Consortium suspended exports from its Black Sea terminal and halted intake because reservoirs were full; an industry source put Kazakhstan shipments via the terminal down 19% in December, to about 1.082 million barrels a day.

A Saudi–UAE dispute linked to Yemen and disruptions around Aden airport added uncertainty. Fundamentals still capped rallies.

Oil stuck in a range

Reuters has cited 2026 surplus estimates as high as 3.84 million barrels a day and record U.S. output of 13.87 million barrels a day in October. For the week ending Dec. 26, crude fell 1.9 million barrels to 422.9 million, while gasoline rose 5.8 million and distillates rose 5.0 million.

In the Dec. 19 data, crude edged up and gasoline built, and Kpler’s Matt Smith pointed to softer gasoline demand. Traders also watched expectations that Saudi Aramco would cut February official selling prices to Asia by 10–30 cents versus Oman/Dubai.

Analysts urged restraint. Sparta Commodities’ June Goh said traders expect OPEC+ to keep its first-quarter pause and that China stockpiling could offer a floor; DBS’s Suvro Sarkar said Brent looks “rangebound” around $60–$65.

Flows and charts backed the range view. USO saw five-day net outflows of $64.26 million, while Brent-linked BNO saw five-day net inflows of $1.43 million.

Brent faced resistance around $61.8–$62.0 and support near $60.6; WTI faced resistance around $58.2–$58.3 and risked the mid-$56s if $57.35 fails. For now, markets favored predictable enforcement and disciplined supply management.

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