CRUDE OIL PRICES STAGE STRONG RECOVERY AMID GEOPOLITICAL TENSIONS AND CHINA STIMULUS SIGNALS

CRUDE OIL PRICES RECORDED A STRONG RECOVERY ON MONDAY, DECEMBER 29, 2025, SUPPORTED BY RENEWED GEOPOLITICAL TENSIONS AND SIGNS OF FISCAL EXPANSION IN CHINA. THE REBOUND COMES AFTER A SHARP DROP AT THE END OF LAST WEEK, WHEN MARKETS PRICED IN THE POSSIBILITY OF A PEACE AGREEMENT IN UKRAINE AND ANTICIPATED AN INCREASE IN GLOBAL SUPPLY.

MARKET GAINS, HOWEVER, WERE PARTIALLY LIMITED BY LOW TRADING VOLUMES DUE TO THE YEAR-END HOLIDAY PERIOD, WHICH REDUCED LIQUIDITY AND MUTED PRICE MOVEMENTS.

GEOPOLITICAL RISKS REMAIN ELEVATED, DRIVEN BY ONGOING INSTABILITY IN THE MIDDLE EAST, CHINA’S MILITARY DRILLS AROUND TAIWAN, AND UNCERTAINTY SURROUNDING DEVELOPMENTS IN THE UKRAINE PEACE TALKS. AT THE SAME TIME, BEIJING’S COMMITMENT TO SUPPORT ECONOMIC GROWTH THROUGH EXPANDED FISCAL SPENDING HAS IMPROVED MARKET SENTIMENT, AS STRONGER ECONOMIC ACTIVITY IS EXPECTED TO BOOST ENERGY DEMAND.

BRENT CRUDE FUTURES FOR FEBRUARY SETTLEMENT WERE TRADING AT US$61.88 PER BARREL AT 2:11 PM BRASILIA TIME, UP 2.04% FROM THE PREVIOUS CLOSE OF US$60.24. OVER THE PAST 52 WEEKS, BRENT HAS TRADED IN A RANGE BETWEEN US$58.40 AND US$82.63 PER BARREL.

DESPITE THE DAILY RECOVERY, BRENT CRUDE REMAINS DOWN 0.21% OVER THE PAST WEEK AND HAS LOST AROUND 2.8% OVER THE LAST MONTH. YEAR-TO-DATE LOSSES STAND AT APPROXIMATELY 17.7%. CURRENT PRICES ARE MORE THAN 18% BELOW LEVELS SEEN ONE YEAR AGO AND NEARLY 28.5% BELOW PRICES FROM THREE YEARS AGO.

WEST TEXAS INTERMEDIATE (WTI) CRUDE FUTURES FOR FEBRUARY DELIVERY ALSO POSTED GAINS, RISING 2.40% FROM THE PREVIOUS CLOSE OF US$56.74 TO TRADE AT US$58.10 PER BARREL. OVER THE LAST 52 WEEKS, WTI HAS TRADED BETWEEN US$54.98 AND US$80.59 PER BARREL.

ON A WEEKLY BASIS, WTI IS SHOWING MODEST GAINS OF AROUND 0.02%, WHILE MONTHLY LOSSES HAVE NARROWED TO APPROXIMATELY 0.9%. YEAR-TO-DATE, WTI PRICES ARE DOWN SLIGHTLY MORE THAN 18.5%. CURRENTLY, WTI IS ABOUT 18.4% BELOW LEVELS SEEN A YEAR AGO AND CLOSE TO 27.9% BELOW PRICES FROM THREE YEARS AGO.

THE RECENT RECOVERY HIGHLIGHTS HOW OIL MARKETS REMAIN HIGHLY SENSITIVE TO GEOPOLITICAL DEVELOPMENTS AND POLICY SIGNALS FROM MAJOR ECONOMIES, EVEN AS LONGER-TERM PRICE PERFORMANCE CONTINUES TO REFLECT CONCERNS ABOUT SUPPLY, DEMAND BALANCE, AND GLOBAL ECONOMIC GROWTH.