Crude oil prices closed lower last week as markets continued to price in signs of oversupply and easing geopolitical risk.
Oil traders remained focused on supply-side developments, with rising production levels and ample inventories reinforcing concerns that the market could move into surplus in the coming months.
Expectations of higher output from major producers, combined with steady non-OPEC supply growth, added pressure to prices throughout the week.
Sentiment was also influenced by diplomatic signals around the Russia–Ukraine conflict. Market participants assessed the possibility of reduced geopolitical risk premiums should progress toward a negotiated settlement materialise. While no formal agreement has been reached, the prospect of de-escalation was sufficient to weigh on oil’s risk-driven support.
Demand-side signals offered limited relief. While consumption remains stable in key economies, traders noted that demand growth has not been strong enough to offset rising supply, particularly as economic activity shows uneven momentum across regions.
Refinery margins and crude buying patterns reflected a more cautious outlook heading into the final weeks of the year.
Weekly price movements underscored a market increasingly driven by fundamentals rather than headline risk events.
Analysts observed that oil prices have become more sensitive to inventory data, production guidance, and forward supply expectations, with geopolitical developments playing a secondary role unless they directly threaten physical supply.
Looking ahead, market focus is expected to remain on production policy signals from major exporters, inventory trends in the United States and Europe, and macroeconomic indicators that could shape demand expectations into the new year.
As the week closed, crude’s downward move reinforced the view that surplus risks are becoming a central theme in the oil market, setting the tone for cautious trading as the market transitions into the year-end period.