Oil prices were largely steady on Monday after strong gains in the previous session, as investors weighed concerns about a potential supply glut against heightened geopolitical risks and awaited signals from a key Federal Reserve policy meeting later this week.
As of 22:18 ET (03:18 GMT), Brent oil futures expiring in March edged down 0.1% to $65.84 per barrel, while West Texas Intermediate (WTI) crude futures also ticked 0.1% lower to $61.03 per barrel.
Both benchmarks rose more than 2% on Friday, supported by a sharp increase in geopolitical risk premiums.
Get exclusive insights on commodity markets, access anlalyst estimates with InvestingPro Oil holds gains amid geopolitical risks Markets were on edge after the U.S. signalled an escalation in military posturing.
President Donald Trump said an “armada” of U.S. naval forces -- including an aircraft carrier group -- was heading toward the Middle East amid rising tensions with Iran, prompting fears that any conflict involving Tehran could disrupt crude shipments from one of the world’s major producers.
Oil markets have also been influenced by Trump’s recent geopolitical tensions over Greenland, which have unsettled broader financial markets.
On the supply front, some pressure on prices eased after Kazakhstan’s main crude export route returned to full loading capacity. The Caspian Pipeline Consortium said operations at its Black Sea terminal were restored after repairs were completed at a mooring point, allowing exports to resume at normal levels.
2026 supply surplus worries remain; Fed meeting awaited Despite the geopolitical backdrop, investors remain cautious about the longer-term outlook. Concerns persist that global oil markets could face an oversupply later this year if production growth outpaces demand, particularly as output from non-OPEC producers remains resilient.
Attention is now turning to the Federal Reserve’s policy meeting due this week, with markets widely expecting U.S. policymakers to keep interest rates unchanged.
Investors will closely watch the Fed’s guidance for clues on the timing of potential rate cuts later this year, as interest rate expectations can influence oil demand through their impact on economic growth and the U.S. dollar.
