London, January 22, 2026, 12:00 GMT — Regular session
- Brent slips roughly 1.6% as geopolitical tensions ease and traders turn their attention back to inventory levels
- IEA highlights a sizable surplus in the first quarter, but producers dismiss concerns of a “glut”
- Upcoming catalysts include U.S. government stockpile figures due Thursday, followed by an OPEC+ meeting set for Feb. 1
Brent crude futures dropped $1.07, or 1.6%, to $64.17 a barrel by 1123 GMT Thursday, while U.S. West Texas Intermediate for March slid $1.02, or 1.7%, to $59.60. The oil price pullback came after a two-day rally boosted by a Kazakhstan outage. President Donald Trump eased tensions by softening his Greenland tariff threats and expressing hope to avoid further U.S. military action in Iran. According to market sources citing the American Petroleum Institute, U.S. crude stocks increased by 3.04 million barrels and gasoline inventories rose 6.21 million last week. Saxo Bank’s Ole Hansen noted “there is a deflation of risk premium,” and Haitong Futures analyst Yang An pointed to “high crude inventories limiting further gains.” 1
That shift counts now as Brent hovers around the mid-$60s. Headline risk still drives the mood, but barrels are holding their ground. The “risk premium” — the extra few dollars buyers shell out betting on supply disruptions — can vanish quickly.
As geopolitical tensions ease, the market shifts focus back to the usual checklist: inventories, refinery throughput, and supply responses when prices climb. It’s not as dramatic, but these factors still drive the curve.
The International Energy Agency pushed that outlook further on Wednesday, forecasting a global oil surplus of 4.25 million barrels per day (bpd) in Q1 2026 — about 4% of total demand. For the entire year, it sees an implied surplus of 3.69 million bpd, down from its previous estimate of 3.84 million bpd. Meanwhile, it raised its 2026 demand growth forecast by 70,000 bpd, now expecting 930,000 bpd. The IEA also flagged that refinery maintenance scheduled for the first quarter usually reduces crude demand, and highlighted OPEC’s anticipation of faster demand growth of 1.38 million bpd this year. 2
Producers offer a contrasting view. Aramco CEO Amin Nasser told reporters in Davos that “oil glut predictions are seriously exaggerated.” He pointed out inventories sit low compared to the five-year average. Spare capacity, which is production that can be quickly ramped up in emergencies, stands at about 2.5%—under the 3% threshold he says the market requires. 3
Combine those perspectives and Brent’s bounce back into the low-to-mid $60s starts to make sense. Traders face the challenge of factoring in a near-term surplus, all while staying on guard for sudden supply risks that could emerge at any moment.
U.S. stockpiles are calling the shots in the near term. When crude and gasoline inventories rise, it often signals weaker demand or ample supply, pushing prices down—even if global news suggests otherwise.
The downside is straightforward. Should refinery maintenance weigh heavily and inventories continue to grow, Brent could slip back toward $60, sparking louder chatter about “oversupply” in the market.
OPEC+ policy is another key factor, with the calendar ticking down. The eight OPEC+ members implementing extra voluntary cuts will reconvene on Feb. 1. They recently confirmed they’ll hold off on planned production hikes for February and March. 4
Traders will also eye official U.S. inventory numbers. The Energy Information Administration’s Weekly Petroleum Status Report is set for Thursday at 12:00 p.m. and 2:00 p.m. Eastern, shifted due to the holiday. The data will cover the week ending Jan. 16. 5
Once the numbers drop, the market snaps right back to its usual battle: inventories against headlines. The next big marker coming up through the chatter is Feb. 1.
