Oil prices climbed nearly 2% in European trading on Monday, rebounding from sharp losses in the previous session. The recovery came after U.S.-led efforts to end the Ukraine war failed to produce a breakthrough, keeping geopolitical uncertainty alive.
As of early trade, Brent crude futures for February delivery rose 1.8% to $61.34 per barrel, while West Texas Intermediate (WTI) crude gained 2% to $57.88 per barrel. Both benchmarks had fallen more than 2.5% on Friday, wiping out most of the week’s earlier gains.
Ukraine Peace Efforts Fail to Calm Markets
Market sentiment had weakened on Friday after renewed diplomatic discussions raised hopes of an end to the nearly three-year-long Ukraine conflict. However, optimism faded as talks failed to deliver concrete progress.
On Sunday, U.S. President Donald Trump said negotiations with Ukrainian President Volodymyr Zelenskiy were moving closer to an agreement. Nevertheless, both leaders admitted that several key issues remained unresolved.
As a result, traders reassessed expectations of a quick ceasefire. Analysts noted that without a clear deal, the return of sanctioned Russian oil supplies remains uncertain. This uncertainty helped stabilize prices at the start of the week.
Supply Surplus Concerns Limit Gains
Despite the rebound, oil prices faced pressure from concerns about a potential supply glut in 2026. Major forecasting agencies have warned that global supply could exceed demand, driven by rising output from non-OPEC producers and slower consumption growth.
Therefore, while geopolitical risks offered short-term support, longer-term supply worries capped further gains.
Venezuela Tensions Offer Additional Support
Meanwhile, oil prices also drew support from rising tensions between the United States and Venezuela. Washington has intensified pressure on Venezuelan crude exports, including steps targeting shipments and buyers.
These measures have tightened supply from the OPEC member, adding another layer of support to crude prices.
Overall, oil markets remain caught between geopolitical uncertainty and surplus fears, keeping price movements volatile.
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