Oil Price Forecast: WTI Near $65 and Brent Around $69 as Geopolitics Collide with US Weather Shock

Oil Price Weekly Overview – WTI CL=F and Brent BZ=F

Oil is trading with a clear risk premium rather than a pure demand boom. International benchmark Brent (BZ=F) climbed from about $65.40 to $68.53 this week, a gain of roughly 4.8%. WTI (CL=F) moved from $61.20 to $64.33, up 5.1%, while spot quotes around $65.21 for WTI and $69–70 for Brent show the market struggling to extend beyond the mid-60s to high-60s band. The pricing structure tells you traders are paying up for geopolitical and weather risk, not for a structurally tight physical balance.

Geopolitical Premium In Brent BZ=F – US–Iran, Cuba Tariffs, EU Versus Russia

The main risk premium in BZ=F is coming from the Middle East and sanctions policy. Tension between Washington and Tehran has intensified, with US naval deployments and aggressive rhetoric driving fears of disruption in a country that ranks as OPEC’s fourth-largest producer. Iran’s pledge to respond forcefully to any attack keeps the market pricing a non-zero probability that flows through the Gulf could be hit, even though volumes have not yet been materially curtailed.
At the same time, the US has opened another front by targeting crude flows to Cuba. A national emergency declaration and tariff threat on countries supplying oil to Havana add Cuba to the sanctions map. The volume is small but the signal is big: energy flows are now being used more aggressively in US foreign policy. China’s rejection of the Cuba tariffs and open support for Havana add another layer of US–China friction, which matters for global trade and sentiment around BZ=F.
Europe is simultaneously shifting from cosmetic control of Russian prices to hard control of logistics. The EU is moving from a $44.10 per barrel price cap to a blanket ban on maritime services for Russian cargoes. Insurers, banks and European shippers will be blocked from handling Russian barrels at any price. That forces more Russian exports into a shadow fleet at larger discounts and higher friction. The Kremlin’s oil and gas revenues are already at five-year lows; a full services ban will deepen the discount and push more molecules toward smaller Asian refiners at steep price cuts. Benchmarks like Brent BZ=F benefit through a higher logistics and quality premium even while total global supply continues to flow.

US Weather Shock – WTI CL=F Lifted By 2 Million Barrels Per Day Offline

For CL=F, the most immediate bullish driver was not OPEC+, but the US winter. A severe cold wave hammered roughly two-thirds of the country, with snow depths above 50 centimeters in some regions and wind chills near –31°C. Along the Gulf Coast, crude production, refinery runs and exports were disrupted. Market estimates put temporary supply losses at around 2 million barrels per day over the weekend.
The supply hit showed up quickly in official data: US commercial crude inventories dropped by about 2.3 million barrels last week. That draw is not proof of a demand boom; it is a direct result of wells, pipelines and export terminals being constrained by weather. With officials warning that the cold wave could persist, traders are forced to respect the possibility of repeated short-term outages. That is why WTI CL=F has been able to trade in the mid-60s despite only modest underlying demand growth.

Power Market Stress, Fuel Oil Spike And The Refined Products Signal For CL=F

The weather shock did not stop at upstream barrels. It spilled over into the power grid, particularly in New England. As gas demand for heating surged and pipeline and LNG costs spiked, dual-fuel generators switched to oil. On January 24, oil-fired generation in ISO New England produced 124,636 MWh versus 107,995 MWh from gas. On January 25, oil output jumped to 167,415 MWh against 126,102 MWh from natural gas. For perspective, oil has topped the New England fuel mix on fewer than 30 days in 15 years.
That switch sent US Atlantic Coast 0.5% sulfur marine fuel prices sharply higher. Bulk values reached $494 per ton on January 29, up $11.75 in a single day and the highest since they traded above $502.50 in early September 2025. Competitive bids around $482 per ton in the physical window highlighted how quickly demand for low-sulfur fuel oil tightens when power markets stress-test dual-fuel capacity. The refined products move reinforces CL=F by proving that oil retains a powerful backstop role when gas becomes too expensive or constrained, even if that demand is episodic rather than structural.

Macro And Fed Backdrop – Rates, Demand And The Floor Under CL=F And BZ=F

On the macro side, monetary policy is providing a cushion rather than a pure bullish catalyst. The Federal Reserve kept its benchmark rate at 3.5%–3.75% at the first meeting of 2026, with a 10–2 vote, and signaled that progress on inflation is uneven but ongoing. Markets continue to price some degree of easing later in the year. That setup reduces the probability of a hard global slowdown and supports expectations for steady, though not spectacular, oil demand.
Crude prices last year were pressured by a supply overhang and erratic consumption. The fact that WTI CL=F is only around $65 and Brent BZ=F around $69–70 after a roughly 5% weekly jump underlines that this is a risk-premium market, not a runaway demand story. The Fed path stops sentiment from collapsing but does not justify chasing prices aggressively higher without fresh supply shocks.

US Supply, Exxon Strategy And The Permian–Guyana Engine

US corporate data highlight how resilient supply remains at current prices. Exxon Mobil’s Q4 2025 earnings came in at $1.71 per share on an adjusted basis, beating the $1.68 consensus despite a weaker oil tape. The reason is volume and cost, not price: annual exploration and production output reached its highest level in more than 40 years, driven by low-cost barrels from the Permian Basin and Guyana. That cost base allows Exxon to stay profitable with CL=F in the 60s and simultaneously cap upside by bringing more supply whenever prices move too far above that range.
Exxon plans to repurchase $20 billion of stock in 2025 and continue this buyback program through the end of 2026, alongside a sizable dividend. These capital-return commitments indicate management expects robust free cash flow even if WTI trades roughly in the $60–70 band. At the same time, the company is selective about high-risk political environments. Analysts are already asking whether Exxon will return to Venezuela now that Washington is encouraging investment under new leadership. The company’s cautious tone – essentially a requirement for strong contractual guarantees before committing capital – suggests that the ramp-up in extreme-risk barrels will be slower and more controlled than some headlines imply.

Venezuela, Kazakhstan And Non-OPEC Barrels – Building A Medium-Term Ceiling On BZ=F

Beyond the short-term shocks, medium-term supply dynamics are leaning against a sustained spike in BZ=F and CL=F. Venezuela has approved a major overhaul of its hydrocarbon laws. The reforms cut taxes and royalties, reduce the state’s monopoly grip, grant private operators more autonomy and allow disputes to be resolved in international or US courts. In parallel, the US Treasury has issued a general license easing several sanctions, allowing US companies to lift, transport and refine Venezuelan crude.
If these changes translate into real barrels, Venezuelan output is likely to rise from depressed levels, sending additional heavy crude into the Atlantic Basin over the next few years. That will soften the supply narrative that currently helps support BZ=F in the high-60s.
In Central Asia, Kazakhstan is working to restore normal flows from the Tengiz field and through the Caspian Pipeline Consortium. Once fully online, that stream reinforces the broader non-OPEC growth story that weighed on prices in 2025. Together with US shale, Brazilian deepwater and other non-OPEC growth, these sources create a medium-term cushion that limits how far and how long Brent can trade well above the low-70s without a genuine, sustained physical disruption.

Russia, EU Services Ban And Quality Spreads In CL=F And BZ=F

The EU’s pivot from a Russian price cap to a full maritime services ban shifts the Russian trade into an even more fragmented ecosystem. European insurers, financiers and shippers will be barred from handling Russian cargoes at any price, pushing more volumes into a loosely regulated shadow fleet. Refiners in Turkey and India have already had to cut back on products derived from Russian crude because of tighter rules on refined product flows into Europe. China continues to take barrels but increasingly via smaller so-called “teapot” refiners that demand heavy discounts.
For the global market, the result is not a collapse in Russian export volumes, but a further widening of the discount versus benchmarks. Russian barrels clear at lower netbacks with higher logistical friction. That allows WTI CL=F and Brent BZ=F to carry a logistics and political premium while the world still has enough total supply. The Kremlin’s fiscal pain goes up, but outright global crude prices remain capped by the fact that the barrels themselves are still on the water, just at cheaper prices and via less transparent routes.

Regional Power, Marine Fuel And What Refined Products Say About CL=F

New England’s experience during the cold snap illustrates how refined products can reprice fast even in a structurally low-growth environment. The region has about 35.5 GW of generating capacity, just 3% of the US total, but holds 20% of the country’s petroleum-fired capacity. Residual oil boilers account for 3.2 GW and distillate-fired turbines for 2.3 GW. These assets usually sit idle, but when LNG prices spike and gas networks are strained, they become the marginal source of power.
As those units ramped up in late January, US Atlantic Coast 0.5% sulfur marine fuel bulk values climbed to $494 per ton, with recent highs just over $500 per ton in September 2025 as the previous reference point. Physical bids in the low-$480s confirmed that demand was not just theoretical. That episodic surge in fuel oil consumption tightens the prompt refined products balance linked to CL=F, supporting cracks and strengthening WTI relative to a scenario where gas carries all of the burden. Once weather normalizes, that incremental demand fades, but the episode reminds the market that oil’s role in power remains a powerful, if intermittent, demand lever.

Price Structure And Key Levels For WTI CL=F And Brent BZ=F

On current pricing, WTI CL=F around $65.21 and Brent BZ=F near $69–70 are well above last week’s prints but still far below peaks seen during earlier geopolitical crises. Weekly moves are clear: Brent up about 4.8% from $65.40 to $68.53, WTI up about 5.1% from $61.20 to $64.33, and the OPEC Basket rising roughly 5.5% to $67.00. Gasoline futures sit near $1.94 per gallon, and US marine fuel 0.5% is just under $500 per ton.
Those levels describe a market that is modestly tight in the short term but not running out of barrels. The low-60s look like a strong support zone for CL=F, given the Fed backdrop, ongoing weather risk and geopolitical premium. For BZ=F, resistance is likely to build as prices convincingly push above $70–72, where non-OPEC growth, Venezuela reforms, Russian discounts and potential demand headwinds from trade tensions all start to reassert themselves.

Trading Stance On Oil – CL=F And BZ=F Buy, Sell Or Hold

When you put the full picture together – US–Iran tensions, US tariffs on Cuba, a harder EU sanctions line on Russia, Venezuelan legal reforms, Kazakhstan’s recovery, US weather disruptions, New England fuel-switching, Exxon’s record Permian and Guyana volumes, and the Fed’s 3.5%–3.75% rate stance – the conclusion is straightforward.
Current prices around $65 for WTI CL=F and just under $70 for Brent BZ=F sit in a risk-premium band where short-term shocks can push quotes several dollars either way, but medium-term supply growth and sanction-driven discounts limit the upside. The balance between geopolitical premium and non-OPEC growth argues for a HOLD view on both benchmarks, with a bias to accumulate on pullbacks toward the low-60s in WTI and mid-60s in Brent, and to be cautious about chasing breakouts much above the low-70s unless a fresh, durable supply disruption materializes.

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