London, January 22, 2026, 11:41 GMT — Regular session
- Brent crude dropped roughly 0.9%, settling near $64.6 a barrel; U.S. WTI also edged down about 0.9%, hovering close to $60.1
- Traders trimmed the geopolitical risk premium as Trump eased his tone on Greenland and Iran
- Attention shifts to U.S. inventory figures due later Thursday and how long Kazakhstan’s Tengiz shutdown will last
Oil prices gave back two days of gains on Thursday, slipping as traders eased concerns over geopolitical risks. By 0954 GMT, Brent crude dropped 61 cents, or 0.9%, to $64.63 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude for March slid 54 cents, also down 0.9%, to $60.08. Ole Hansen, chief commodity analyst at Saxo Bank, described the move as a “deflation of risk premium” amid cooling headlines from Greenland and Iran. Reuters
The market still faces a core issue: an oversupply in Q1 despite persistent disruption risks. On Wednesday, the International Energy Agency forecasted that global supply could outpace demand by 4.25 million barrels per day in early 2026. It projected a 2026 surplus of 3.69 million bpd, even after nudging its demand growth estimate up by 70,000 bpd to 930,000 bpd. The IEA also highlighted refinery maintenance season in early 2026 as a drag on crude demand. Meanwhile, OPEC expects demand growth to be stronger.
U.S. inventory figures are showing a similar trend. According to the American Petroleum Institute (API), an industry group, crude inventories climbed by 3.04 million barrels for the week ending Jan. 16, with gasoline stocks up 6.21 million barrels. Distillates, which include diesel and heating fuel, dipped by 33,000 barrels. Yang An from Haitong Futures noted that ample crude supplies are capping price gains in this oversupplied market. Analysts surveyed by Reuters had anticipated a smaller crude build.
Disruptions continue to overshadow the surplus narrative. Kazakhstan’s energy ministry announced an investigation into a Jan. 18 fire at a power unit that forced a shutdown of the massive Tengiz oilfield. Sources suggest the outage could drag on for another 7-10 days. Tengizchevroil, the operator, has declared force majeure on CPC Blend shipments, invoking the contract clause that allows suspension of deliveries after unforeseen events.
At Davos, Saudi Aramco CEO Amin Nasser dismissed forecasts of a 2026 oil glut as “seriously exaggerated.” He told reporters that global oil inventories remain low compared to the five-year average and highlighted the limited spare capacity. Reuters
Crude keeps falling back into a familiar pattern this month: jumping on the newest headline, only to stall once supply and inventory concerns resurface.
A quieter geopolitical backdrop works both ways. It reduces the risk of a sharp supply disruption, but it also removes the premium that’s been propping Brent around the mid-$60s.
On the downside, U.S. inventories could climb through refinery maintenance season, pushing a surplus into view and dragging Brent back toward the low-$60s. The upside plays out if outages in Kazakhstan extend or fresh supply risks emerge in the Middle East.
The next key catalyst will be the U.S. Energy Information Administration’s weekly petroleum status report, set for Thursday at 12:00 p.m. and 2:00 p.m. Eastern time due to the Jan. 19 federal holiday.
