NEW YORK, January 3, 2026, 04:10 ET
- Brent ended the first 2026 session at $60.75 a barrel; U.S. WTI settled at $57.32 after both slid nearly 20% in 2025.
- Traders are watching an OPEC+ policy meeting this weekend for clues on supply strategy in the first quarter.
- Banks and industry forecasters are warning an oversupplied market could keep crude near five-year lows in 2026.
Oil prices settled slightly lower on the first trading day of 2026 after Brent and U.S. crude posted their biggest annual loss since 2020, each falling nearly 20% in 2025, as investors weighed oversupply concerns and looked to a policy meeting on Sunday by OPEC+, the group of OPEC and allied producers such as Russia. Brent futures closed down 10 cents at $60.75 a barrel and U.S. West Texas Intermediate fell 10 cents to $57.32; Brent logged its third straight annual decline, its longest losing streak on record. “Oil prices are locked in this long-term trading range,” said Phil Flynn, senior analyst at Price Futures Group. 1
The subdued start to the year matters because crude prices feed into gasoline, diesel and jet fuel costs and can sway inflation readings that investors and policymakers track closely.
For producers, a prolonged slump near $60 squeezes government budgets and corporate cash flow, raising pressure on spending plans and on output strategy in early 2026.
Traders have largely treated recent geopolitical headlines as secondary, with the market’s focus on whether global supply keeps outpacing consumption.
That puts added weight on near-term decisions by large producers, since even small shifts in output policy can quickly tighten or loosen the balance.
Crude fell below $60 a barrel for the first time in almost five years in December, and Brent ended 2025 at $60.85, down from almost $74 at the end of 2024, according to figures cited by analysts. The International Energy Agency expects global supplies to exceed demand by about 3.8 million barrels per day in 2026 even after OPEC delayed planned output increases until after the first quarter. BNP Paribas analysts see prices dipping to around $55 by spring, while JPMorgan and Goldman Sachs strategists also expect Brent in the $50s as demand growth softens, including from China. 2
A Wall Street Journal Market Talk column said crude prices could stay above $50 a barrel this year but remain near a five-year low, underscoring the market’s focus on supply. 3
The drop in 2025 left both benchmarks trading close to levels that have forced refiners and traders to ask whether a spring demand rebound can absorb barrels already in storage.
Lower crude prices can bring relief at the pump, but the pass-through depends on refinery margins, taxes and inventory levels, and it often lags moves in futures markets.
Oil exporters also face tighter revenue if prices stay depressed, and companies typically adjust drilling and investment plans when weakness persists for months rather than days.
