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Informist, Monday, Jan. 5, 2026

 

By Taniva Singha Roy

 

MUMBAI – Crude oil prices in January are likely to be range-bound with a mild downward bias, analysts said. Supply, not demand, is the dominant driver heading into 2026. Demand is growing but not fast enough to absorb the excess barrels already in the system, which is why oil is far from seeing an upward trajectory, they said.

 

According to the median of estimates from eight broking firms polled by Informist, the January crude oil contract on the Multi Commodity Exchange of India is seen in the range of INR 5,050-INR 5,500 per barrel this month. The December contract of West Texas Intermediate crude on the New York Mercantile Exchange is expected to trade between $54 and $62 per barrel.

 

Prices are biased lower on average in 2026 versus 2025. This reflects persistent oversupply and elevated inventories, not a collapse in demand, analysts said. The Organization of the Petroleum Exporting Countries and allies have shifted from price defence to protecting market share. The aggressive return of supply in 2025 has weakened its pricing authority with spare capacity limited, said Navneet Damani, Head Research Commodities & Currency at Motilal Oswal Financial Services, in a note.

 

Oil markets began the first trading sessions of 2026 on a steady note after a sharp decline in prices last year. OPEC and allies kept oil output unchanged on Sunday after a quick meeting that avoided discussion of the political crises affecting several of the producer group's members.

 

The decline in oil prices during 2025 was largely attributed to a supply surplus. OPEC and allies gradually rolled back earlier production cuts, while output from non-OPEC producers remained elevated. These conditions offset repeated concern over geopolitical risks, keeping downward pressure on prices throughout much of the year.

 

However, some also believe there could be an upside in crude oil prices if geopolitical concerns persist. Demand too may rise. "We are seeing consolidation. But crude oil could break out soon in the international market. Chinese manufacturing data is indicating some demand revival. US third quarter GDP numbers were also robust. The European economy is also showing signs of recovery," said Manoj Jain, director - head commodity and currency research at Prithvi Finmart Private Ltd. Demand could increase globally from the second quarter onwards. Additionally, if geopolitical tensions ease and the US cuts or eases tariffs on various countries, especially India, this would further boost crude oil demand, he added. 

 

Geopolitical tensions increased over the weekend when US President Donald Trump said that the US had launched a "large-scale strike" on Venezuela, including in the capital Caracas. The US officials announced that Venezuelan President Nicolas Maduro and his wife Cilia Flores were transported to New York after the military operation, and faced charges of narco-terrorism conspiracy along with additional offences.

 

Subsequently, Trump also said that the US might launch a second military strike on Venezuela following the capture of President Nicolas Maduro if remaining members of the administration do not cooperate with his efforts to get the country "fixed".

 

However, geopolitical risks now drive only volatility, not direction. Price spikes fade quickly in a well-supplied market unless disruptions are severe and sustained, Damani said. Until production is curtailed, downside pressure persists, according to analysts.

 

Stabilisation or an uptick would require visible supply destruction, stronger demand, or decisive OPEC+ cuts. Prices could continue to move in a broad range unless there is a significant rise in the overall risk premium to provide a boost in prices, according to Motilal Oswal financial services.

 

At 1612 IST, the most-active February contract of crude oil on the NYMEX was steady at $57.32 per barrel. 

 

Following are the details of the estimates of brokerages on crude oil prices for January:

 

Brokerage	MCX support (in INR)	MCX resistance	NYMEX WTI support ($)	NYMEX WTI
		(in INR)		resistance ($)
Kedia Advisory	4,980	5,650	52	64
Nirmal Bang	5,100	5,300	56.5	60
Prithvi Finmart	4,980	5,650	52	64
Reliance Securities	5,000	5,900	50	65
LKP Securities	4,900	5,500	54	61
Kotak Securities	5,300	5,000	55-52	58
Ventura Securities	5,100	5,580-5,900	54	62-65
SMC Global Securities	5,220	5,400	54	62
Median	5,050	5,500	54	62

 

End

 

US$1 = INR 90.27

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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