Oil Rebounds Slightly, Could It Be Just a Temporary Bounce?
Oil prices rose slightly at the start of the Asian session on Monday after dropping more than 4% last week. The February Brent contract strengthened by about 0.5% to around $61.44 per barrel, while WTI rose 0.6% to around $57.76 per barrel. This increase appears to be a technical rebound following previous heavy selling pressure.
Market sentiment remains dominated by concerns about a global oversupply and a weak demand outlook. Output from major producers, both from the OPEC+ group and non-OPEC countries, continues to rise while inventories remain high. Analysts assess the oil market heading into 2026 with a risk of a surplus, primarily due to sluggish consumption growth in China and Europe.
On the geopolitical front, oil has received limited support. Ukraine's ongoing attacks on Russian energy infrastructure have raised concerns about supply disruptions, as have escalating tensions between the US and Venezuela, which could pressure Caracas' oil exports. However, so far, these factors have not been strong enough to offset the bearish sentiment caused by the supply glut.
On the contrary, hopes for diplomatic progress to end the Russia-Ukraine war have actually added to medium-term pressures. If a peace agreement is reached and sanctions on Russian oil are eased, the market could potentially receive more barrels, further limiting the room for price increases.
On the demand side, Chinese data on Monday showed industrial production and retail sales below expectations, highlighting an uneven economic recovery. As the world's largest oil importer, China's weak economy and property sector mean demand for energy and industrial commodities is likely restrained. The combination of global oversupply and weak demand makes the current oil price rally appear fragile. (asd)
Source: Newsmaker.id
