Oil edges higher after biggest annual loss since 2020

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Published02 JAN 26 - 09:49 Reading time minutes

Traders widely expect OPEC+ to continue its pause on output increases in the first quarter, said Sparta Commodities analyst June Goh. “2026 will be an important year on assessing OPEC+ decisions for balancing supply,” she said, adding that China would continue to build crude stockpiles in the first half, providing a floor for oil prices.

Reuters, Jan 2, 2026 – Oil prices edged higher at the start of 2026 after suffering their biggest annual loss since 2020, with Brent and WTI down nearly 20% in 2025 as oversupply and weak demand outweighed geopolitical risks. While renewed attacks on Russian energy infrastructure, tighter pressure on Venezuelan exports and Middle East tensions added near-term noise, analysts see limited upside, with OPEC+ expected to keep output on hold in the first quarter. China’s continued crude stockpiling is providing a price floor, but the broader outlook remains range-bound around the low $60s as surplus supply dominates into early 2026.

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Author

June Goh

Senior Oil Market Analyst

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