Oil prices rose during European trading on Monday after sharp losses in the previous session, as U.S. led talks aimed at ending the war in Ukraine failed to deliver a tangible breakthrough. However, gains were capped by persistent concerns over a potential supply surplus heading into 2026.
Brent crude futures for February delivery climbed 1.8% to $61.34 per barrel, while West Texas Intermediate (WTI) crude futures advanced 2% to $57.88 per barrel. Both contracts had fallen more than 2.5% in the prior session, erasing most of the gains recorded earlier in the week.
The rebound followed a period of weakened market sentiment after renewed diplomatic efforts raised hopes of a possible end to the nearly three year long conflict. U.S. President Donald Trump said talks with Ukrainian President Volodymyr Zelenskiy were “very close, maybe extremely close” to reaching an agreement to end the war. However, both leaders acknowledged that several complex issues remain unresolved.
This was followed by a series of U.S. led diplomatic initiatives aimed at securing a ceasefire. The absence of concrete progress helped oil prices stabilize, as traders assessed that a swift resolution and any rapid return of sanctioned Russian supply remains uncertain. Any credible peace agreement would likely pressure oil prices over time by reducing the geopolitical risk premium that has supported the market since Russia’s invasion of Ukraine.
At the same time, growing concerns over a potential supply glut weighed on sentiment. Major forecasting agencies and analysts have warned that global supply could exceed demand in 2026, driven by rising production outside OPEC and slowing consumption growth. Nevertheless, prices have recently found additional support from escalating tensions between the United States and Venezuela, as Washington intensified pressure on Venezuelan crude exports, including measures targeting shipments and buyers, effectively tightening supplies from the OPEC member.
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