Crude Markets Face Multi-Layered Pressure Amid Supply Glut Risks

Oil markets are under renewed selling pressure as traders navigate a complex mix of headwinds. Brent crude retreated over 1% to $60.13 per barrel, while WTI slipped 1% to $56.73, both reflecting deepening concerns about oversupply conditions and weakening global demand.

OPEC+ Maintains Course Despite Market Softness

At its Sunday meeting, OPEC+ opted to keep production levels steady through Q1, a decision that underscores the group’s confidence in managing market dynamics. However, the eight member nations—Saudi Arabia, Russia, UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman—remain poised to increase output by 2.9 million barrels per day from April through December 2025. This production boost represents nearly 3% of global daily demand and signals potential vulnerabilities to the supply glut narrative that’s already pressuring prices.

China’s Economic Slowdown Adds to Bearish Mix

On the demand side, headwinds are mounting. A private sector gauge revealed that China’s services activity expanded at its weakest pace in half a year during December, with new business creation and overseas demand both retreating. The broader economic outlook for the world’s largest crude importer remains clouded by subdued consumer spending and rising trade tensions, further dampening prospects for near-term oil demand recovery.

Dollar Strength and Venezuela Uncertainty Compound Losses

The U.S. dollar’s rally—triggered by heightened geopolitical tensions surrounding potential leadership changes in Venezuela—adds another layer of downward pressure on crude valuations. There’s mounting speculation that accelerated Venezuelan production revival, combined with looser policy approaches, could exacerbate the global supply glut scenario, keeping crude markets under structural pressure in the near term.