The new year began with Brent crude oil prices falling to $60.85 per barrel, down just under 1% from the day before. This drop continues a trend from the past month, with prices down about 2.5%, and almost 20% lower than at the same time last year.
Oil prices had already been weakening at the end of 2025. On December 31, Brent settled at $61.10 per barrel, marking the biggest annual drop since 2020. The main reason for the fall is too much supply in the market: countries that produce oil, both within OPEC+ and outside it, are pumping a lot of oil, while global demand hasn’t grown as quickly.
Traders are now watching a few key things closely. OPEC+, the group of major oil-producing countries, is meeting soon and is expected to keep production steady for the first three months of 2026. Any sudden change in their plan could move prices up or down.
Geopolitics also play a role, for example, the US has blocked some Venezuelan oil shipments, there are tensions in the Middle East, and the situation between Russia and Ukraine is still uncertain. Any of these events could affect how much oil actually reaches the market.
In the United States, the American Petroleum Institute reported that crude oil inventories rose by 1.7 million barrels last week, the biggest increase since mid-November. If official data confirms this, it could signal that supply is still high and put more pressure on prices.
Looking at the bigger picture, Brent is down about 2% in December alone, on track for its fifth straight monthly drop. This reflects worries that the oil market may remain oversupplied for some time.
As 2026 begins, how OPEC+ acts, what happens with inventories, and whether demand grows faster will all help determine the path of oil prices in the months ahead.
