Global crude oil prices weakened on Thursday as markets recalibrated geopolitical risk and shifted focus back to structural oversupply concerns. Early optimism driven by political rhetoric faded quickly, leaving traders to reassess fundamentals that continue to cap price momentum.
At the same time, volatility across energy markets remained uneven, with natural gas extending gains amid extreme winter conditions in the United States, underscoring the growing divergence between oil and gas price drivers.
Brent slides as geopolitical risk premium fades
As at the time of writing 8:00 PM (WAT) on Thursday, Brent crude, the international benchmark, led losses as easing geopolitical tension reduced the short-term risk premium priced into the market earlier this week.
Front-month Brent futures traded at $63.90 p barrel, down 2.05%, slipping further below the psychologically important $65 threshold. The pullback followed comments by U.S. President Donald Trump at the World Economic Forum in Davos, where he signalled a softer stance on proposed tariffs linked to Greenland’s sovereignty.
Trump said a “framework of a future deal” had been reached following discussions with NATO Secretary General Mark Rutte, easing fears of an imminent trade clash between the United States and the European Union. As tensions cooled, speculative positioning retreated, exposing the underlying oversupply that has weighed on prices in recent months.
WTI retreats below $60 as supply concerns resurface
U.S. benchmark WTI crude also extended losses, falling below the $60 per barrel mark it briefly reclaimed earlier in the week. WTI traded at $59.24, down 2.28%, reflecting renewed bearish sentiment among traders.
The decline came as market participants turned their attention back to ample global supply, resilient U.S. production levels and slowing demand growth expectations. While geopolitical flare-ups in regions such as Iran and Greenland had previously lent temporary support, analysts note that without sustained disruptions, price rallies remain vulnerable to quick reversals.
Saudi Aramco’s chief executive officer, Amin Nasser, sought to calm market fears by dismissing claims of a looming oil glut, describing projections of massive oversupply as “seriously exaggerated.” However, traders appeared unconvinced in the near term, opting to reduce risk exposure.
Natural gas rallies as Arctic cold tightens U.S. supply
In contrast to crude, U.S. natural gas prices surged, supported by severe Arctic cold gripping large parts of North America. Natural gas traded at $4.953, up 1.60%, following a sharp rally earlier in the week that saw prices jump by as much as 45% in two days.
The extreme weather has driven a spike in heating demand, tightened storage withdrawals and reignited concerns over supply adequacy through the peak winter period. Unlike oil, where supply remains relatively comfortable, the gas market is currently being driven by immediate weather-linked fundamentals rather than geopolitical narratives.
Elsewhere in the crude complex, Murban crude traded at $64.62, down 2.45%, while broader energy markets remained sensitive to shifts in policy signals, weather patterns and macroeconomic expectations.