Oil prices were little changed on Monday, holding on to recent gains as traders weighed rising geopolitical tensions against lingering concerns over a potential supply surplus, while also looking ahead to guidance from the Federal Reserve later this week.
At 22:18 ET (03:18 GMT), Brent crude futures for March delivery slipped 0.1% to $65.84 a barrel, while U.S. West Texas Intermediate (WTI) crude futures also eased 0.1% to $61.03 a barrel.
Both benchmarks had climbed more than 2% on Friday, buoyed by a jump in geopolitical risk premiums.
Geopolitical tensions underpin prices
Market sentiment remained fragile after the United States signalled a tougher military stance. President Donald Trump said an “armada” of U.S. naval forces — including an aircraft carrier strike group — was moving toward the Middle East as tensions with Iran escalated. Any conflict involving Tehran has raised concerns about potential disruptions to oil shipments from one of the world’s key producing regions.
Crude markets have also been influenced by Trump’s recent geopolitical moves related to Greenland, which have added to volatility across global financial markets.
On the supply side, some downward pressure on prices eased after Kazakhstan’s primary crude export route returned to full capacity. The Caspian Pipeline Consortium said its Black Sea terminal was back to normal operations following repairs at a mooring point, allowing exports to resume at standard levels.
Oversupply concerns linger as Fed meeting approaches
Despite near-term geopolitical support, investors remain wary of the medium-term outlook. There are ongoing concerns that oil markets could slip into oversupply later in the year if production growth continues to outpace demand, particularly with non-OPEC output proving resilient.
Focus is now shifting to the Federal Reserve’s policy meeting this week, where U.S. policymakers are widely expected to leave interest rates unchanged. Markets will closely scrutinize the Fed’s forward guidance for signals on when rate cuts might begin later this year, as interest rate expectations can shape oil demand through their impact on economic growth and the U.S. dollar.