By Giulia Petroni
Here is a look at what happened in oil markets in the week of Jan. 12-16 and what the focus will be in the days to come.
OVERVIEW: Oil prices are on track for weekly gains as supply risks remain in focus, though concerns over imminent U.S. military action against Iran subsided. In afternoon trading in Europe, Brent crude was around $64 a barrel, while West Texas Intermediate was above $59 a barrel.
MACRO: U.S. jobless claims fell last week, further trimming prospects of imminent interest-rate cuts by the Federal Reserve. Still, traders' bets on a midyear cut were reinforced by the latest consumer-price data. Markets continue to price in a rate cut at the U.S. central bank's June policy meeting, with some chance of an earlier move.
Meanwhile, all eyes are on the criminal investigation into Federal Reserve Chair Jerome Powell, which he said was part of a pressure campaign to get the central bank to lower interest rates and that now threatens to disrupt the race over who President Trump will choose to succeed him.
GEOPOLITICAL RISKS: Developments in Iran are currently the main drivers of prices on the oil market. Fears of potential supply disruptions in the oil-rich region pushed crude higher this week, with traders concerned over possible U.S. strikes against Iranian oil infrastructure or retaliation by Tehran that could have disrupted shipping through the Strait of Hormuz.
"The price of a barrel of Brent crude oil climbed to almost $67, reaching its highest level since early October," analysts at Commerzbank said. "However, following the latest statements by President Trump, the risk of immediate American intervention was downgraded."
Meanwhile, adverse weather, drone attacks and maintenance are threatening exports from Kazakhstan, with loadings at the Caspian Pipeline Consortium terminal falling to around 400,000 barrels a day in January from more than 1 million barrels a day in December, according to data provider Kpler.
SUPPLY AND DEMAND: The overall fundamentals outlook remains bearish due to growing oversupply in global markets. However, the U.S. Energy Information Administration said crude production is likely to slow this year and next as a result of lower oil prices, leading to an eventual slowdown in inventory builds.
The latest EIA data showed an unexpected build in U.S. stocks. Crude inventories rose by 3.4 million barrels last week, against expectations of a 1.4-million-barrel fall, while gasoline stocks jumped by 9 million barrels from an expected 1.7-million-barrel build.
Meanwhile, in its first look at 2027, the Organization of the Petroleum Exporting Countries said it expects world oil demand to grow at a steady pace, rising by 1.34 million barrels a day from estimated 1.38-million-barrels-a-day growth this year.
WHAT'S AHEAD: On next week's economic calendar, U.S. markets will be closed Monday for the Martin Luther King Jr. Day holiday. Attention then turns to GDP data, PCE inflation and consumer sentiment readings for further clues on the Federal Reserve's policy path.
Markets will remain focused on Iran, though sustained signs of easing could shift attention back to Venezuelan oil exports. The International Energy Agency's monthly report due on Wednesday could refocus attention on oversupply and weigh on prices.
"The IEA's monthly report could bring the fundamental situation on the oil market back into focus, after the new forecasts by the U.S. Energy Information Administration and OPEC received little attention this week due to the escalation in Iran," Commerzbank analysts said.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
January 16, 2026 11:02 ET (16:02 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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