Crude oil prices fell after OPEC+ again decided not to raise output in the first quarter of 2026, a move that has helped underpin crude oil prices in recent weeks.
At a meeting on 1 February, the eight member states with voluntary production cuts reiterated their decision to keep quotas unchanged. The meeting lasted just six minutes, signalling broad agreement among participants.
Temporary supply disruptions in the US and Kazakhstan have also tightened the market, with cold weather in the US hitting production by as much as two million barrels per day before easing to around 500,000 barrels per day, and a power outage and problems at the Caspian pipeline consortium disrupting Kazakhstan, although production is being restored.
Venezuelan exports were also materially lower in January. At the same time, a weaker US dollar and geopolitical tensions in the Middle East have supported prices.
These factors helped Brent crude trade above US$70 a barrel in January, a four-month high.
But UBS strategists say much of the support is temporary. “An easing of those disruptions is our base case,” they wrote.
If US and Kazakh supply comes back online and logistics improve, the market should be better supplied in the coming weeks, and prices could drift lower from current levels.
OPEC+ has emphasised that it will “continue to closely monitor and assess market conditions” and stands ready to adjust output if fundamentals require it. For now, that means keeping a close eye on supply data out of North America and Central Asia as well as broader demand trends.
Other analysts pointed to geopolitical factors as putting pressure on crude prices.
Brent crude futures were down by over 5% early on Monday, with Deutsche Bank macro strategists saying that they were "being impacted by the commodities deleveraging and news that Washington is in talks with Iran".
Nikos Tzabouras, senior market analyst at Tradu, said oil prices fell after President Trump signalled talks with Iran, "easing geopolitical tensions and supply disruption risks".
"The decline could extend as de-escalation shifts focus back to unfavourable fundamentals, with supply rising faster than demand amid global economic headwinds."
Tzabouras said a rebound in the US dollar also weighed on oil prices following the nomination of a less dovish Fed chair pick of Kevin Warsh.
"However, oil could find support as supply risks are likely to persist. President Trump has threatened Iran with military action and deployed ships to the region, while Khamenei warned of a regional war."