London, Jan 21, 2026, 11:59 GMT — Regular session
- Brent slips toward $65 following a 1.5% rise the previous day
- Traders debate the impact of Kazakhstan’s supply halt amid concerns over tariff-driven demand drops
- Next up: stockpile data from API and EIA, delayed due to a U.S. holiday
Oil prices slipped on Wednesday, retreating from Tuesday’s rally as traders weighed forecasts of a U.S. crude stockpile increase alongside renewed trade tensions. By 1125 GMT, Brent futures had dropped 12 cents to $64.80 a barrel, and U.S. West Texas Intermediate (WTI) eased 11 cents to $60.25.
The market faces a tug-of-war between short-term supply disruptions and growing worries that tariffs might slow growth and curb fuel demand. Prices remain locked in a narrow range, making upcoming U.S. stockpile reports a likely catalyst for movement—more so than news headlines.
The temporary halt at Kazakhstan’s Tengiz and Korolev fields remains, though the initial disruption has eased. Three industry insiders told Reuters the shutdown might extend for another seven to 10 days. Some export shipments have been scrapped, but other fields are boosting production to offset the shortfall.
Brent climbed 98 cents, or 1.53%, to close Tuesday at $64.92, boosted by the Kazakh production halt and stronger-than-anticipated Chinese economic figures that lifted demand hopes. The March WTI contract, more actively traded, jumped $1.02 to finish at $60.36 following the expiration of the February contract.
Ajay Parmar, ICIS director of energy and refining, described Tengiz as “certainly disruptive for crude flows” but noted the market views it as a short-term issue. He added that if tariff talk intensifies, “we expect prices to fall back.” Reuters
The tariff chatter picked up again. On Tuesday, Trump insisted there’s “no going back” on his aim to control Greenland, following earlier warnings about slapping new tariffs on several European nations if no agreement is struck. European Commission President Ursula von der Leyen called the tariffs a mistake and said the EU is developing an Arctic security package. Reuters
U.S. crude stockpiles are shaping up as a near-term headwind. A Reuters poll of analysts predicts inventories climbed by roughly 1.7 million barrels in the week ending Jan. 16. Such a build usually points to weaker demand or an uptick in supply in the world’s largest oil consumer.
Timing is off this week. The American Petroleum Institute’s weekly data drops at 2130 GMT Wednesday, while the U.S. Energy Information Administration’s government report comes at 1700 GMT Thursday. Both got delayed by a federal holiday.
IG analyst Tony Sycamore described the Kazakh outage as temporary, cautioning that a likely increase in U.S. inventories might weigh on prices. UBS analyst Giovanni Staunovo highlighted a more cautious “risk-off” mood, citing tariff threats that are fueling concerns over economic growth. Reuters
Tuesday’s rally got a boost from several factors that might not last: a softer dollar, rising diesel prices, and the IMF’s recent upward tweak to global growth forecasts, Reuters reported. These elements help, but they don’t solve the larger demand concerns tied to tariffs.
The International Energy Agency raised its 2026 global oil demand growth forecast to 930,000 barrels per day, up from 860,000 bpd, though it still projects supply will outpace demand by 3.69 million bpd. The agency pointed to “bloated balances” as a key factor keeping prices subdued. Reuters
The downside isn’t set in stone. Gregory Brew, senior analyst at Eurasia Group, noted that renewed U.S.-Iran tensions might keep prices elevated. Plus, the Kazakh shutdown could extend beyond initial estimates if operational problems persist.
Traders are eyeing U.S. inventory reports due Wednesday and Thursday next, along with news on when Tengiz and Korolev will resume normal output. They’re also watching for signs that tariff threats might shift from talk to a concrete timeline that could rattle markets.
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