Key Moments
- Brent slipped to $63.55 per barrel and U.S. West Texas Intermediate to $59.04 per barrel in Asian trading at 0418 GMT.
- Prices pulled back after U.S. President Donald Trump indicated he would hold off on potential military strikes on Iran.
- Analysts highlighted comfortable supply conditions and projected range-bound Brent trading between $57 and $67.
Market Action in Asian Trading
Jan 16 (Reuters) – Crude benchmarks moved lower in Asian trade on Friday, extending the previous session’s declines as fears over supply disruptions eased with a reduced likelihood of U.S. military action against Iran.
| Contract | Price | Move | Percent Change | Time (GMT) |
|---|---|---|---|---|
| Brent | $63.55 per barrel | -$0.21 | -0.3% | 0418 |
| U.S. West Texas Intermediate (WTI) | $59.04 per barrel | -$0.15 | -0.3% | 0418 |
Both Brent and U.S. West Texas Intermediate had climbed to multi-month highs earlier in the week as protests escalated in Iran and U.S. President Donald Trump signaled the possibility of strikes on the country. Despite the pullback, Brent remained on track for a fourth consecutive weekly gain.
Shift in Geopolitical Risk Premium
Late on Thursday, Trump said Tehran’s response to protesters had started to ease, helping to calm market concerns around the risk of military confrontation and potential disruptions to oil flows.
According to BMI analysts, Brent has now retraced part of its earlier rally but still trades above levels seen a week ago, with the reversal in prices driven by Trump’s indication that he would delay any strikes on Iran.
“Given the potential political upheaval in Iran, oil prices are likely to experience greater volatility as markets digest the potential for supply disruptions,” they said.
Sentiment vs Fundamentals
Analysts continued to emphasize a bearish tilt on the broader supply outlook for the current year, even after earlier projections from OPEC suggesting a broadly balanced market.
“Sentiment is driving markets, but the impact of headlines is always short-lived, especially when fundamentals look comfortable in the backseat,” said Phillip Nova senior market analyst Priyanka Sachdeva.
“Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply … unless we see a genuine revival in Chinese demand or a meaningful bottleneck in physical barrel flows, oil looks range-bound, with Brent broadly hovering between $57 and $67.”
OPEC Outlook and Shell Scenario Analysis
On Wednesday, OPEC stated that it expected oil supply and demand to remain in balance in 2026, with demand in 2027 forecast to grow at a rate similar to this year’s increase.
On Thursday, Shell released its 2026 Energy Security Scenarios, outlining a constructive view on future energy consumption and oil demand. The company projected that primary energy demand by 2050 could be 25% higher than last year.
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