Oil prices moved slightly lower on Monday, building on the steep declines seen last week as worries about excess global supply and a soft demand outlook continued to weigh on the market.
By 06:05 ET (11:05 GMT), Brent crude futures for February delivery were down 0.2% at $61.02 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 0.2% to $57.15 a barrel.
Both benchmarks fell more than 4% last week, driven largely by concerns that global oil production is growing faster than demand. Analysts have cautioned that the market is heading into 2026 with a supply surplus, as increased output from OPEC+ and non-OPEC producers comes at a time of muted consumption growth, particularly in China and Europe.
These dynamics have made it difficult for crude prices to sustain rallies, even when geopolitical risks briefly flare.
Ukraine diplomacy and China data weigh on sentiment
Expectations that diplomatic efforts could eventually bring an end to the conflict in Ukraine have also pressured prices, as a potential peace agreement may allow more Russian oil to return to global markets.
Recent discussions involving U.S. and Russian officials have fueled speculation that sanctions could be gradually eased if a deal is reached, increasing supply and adding further downward pressure on crude.
Meanwhile, economic data from China released on Monday added to demand concerns. Industrial production in November came in below expectations, while retail sales also disappointed, highlighting uneven growth in the world’s second-largest economy.
China, the largest importer of crude oil, continues to grapple with sluggish economic momentum and prolonged weakness in its property sector, weighing on demand for energy and other industrial commodities.
Geopolitical tensions offer limited support
Ongoing strikes on Russian energy infrastructure have done little to provide lasting support for prices, as optimism around peace talks has overshadowed concerns about potential supply disruptions.
At the same time, renewed tensions between the United States and Venezuela offered some near-term price support. Washington has recently increased pressure on Caracas, raising the possibility that stricter enforcement could curb Venezuelan crude exports.
Venezuela holds some of the world’s largest proven oil reserves, and any constraints on its exports could marginally tighten global supply.