New York oil prices closed slightly lower after experiencing significant volatility on the first trading day of 2026. Geopolitical concerns surrounding the situation in the Middle East roiled the market, but prices fluctuated within a limited range due to the absence of direct supply disruptions.
On January 2nd local time, West Texas Intermediate (WTI) crude oil for February delivery, traded on the New York Mercantile Exchange, closed at $57.32 per barrel, down $0.10 (a decrease of 0.17%) from the previous trading day. During the day, oil prices saw intraday gains as high as 0.89% and losses as deep as -1.43%, fluctuating by more than 2 percentage points, but ultimately failed to establish a clear direction, hovering near the flat line.
This oil price fluctuation is related to comments made by US President Donald Trump regarding Iran. President Trump again took a hard line on the anti-government protests in Iran, stating that the US might intervene if peaceful demonstrations are violently suppressed. He warned on his social media platform, Truth Social, "If Iran violently suppresses protesters again, we are ready to go and rescue them."
These remarks have heightened tensions in the Middle East, raising concerns about potential risks to oil supplies. Iran is a major crude oil exporter, and the Strait of Hormuz is a crucial shipping route for crude oil. Furthermore, the escalating conflict between Saudi Arabia and the United Arab Emirates over Yemen has exacerbated market anxieties about the potential impact of overall instability in the Middle East on future supply chains.
Against this backdrop, the market is focused on the outcome of the OPEC+ meeting scheduled for January 4th. The market widely expects the meeting to likely postpone the planned production increase. Jon Gorton, chief analyst at energy market analysis firm Sparta Commodities, stated, "Traders are increasingly expecting OPEC+ to continue pausing production increases in the first quarter."
This move is expected to alleviate concerns about oversupply and partially offset upward pressure on oil prices caused by geopolitical risks. However, the market remains cautious, believing that if geopolitical tensions actually lead to a disruption in crude oil supply, oil prices could surge in the short term.
