Oil prices edged lower on Monday after rallying more than 2% in the prior session, as traders weighed temporary U.S. production losses from winter storms against easing supply risks elsewhere and persistent geopolitical uncertainty. Brent crude slipped 29 cents, or 0.4%, to settle at $65.59 a barrel, while U.S. West Texas Intermediate fell 44 cents, or 0.7%, to $60.63.
The pullback followed last week’s strong gains, with both benchmarks finishing Friday up roughly 2.7% and at their highest levels since mid-January. Over the weekend, severe winter weather disrupted U.S. oil output, with analysts estimating peak losses of up to 2 million barrels per day, led by the Permian Basin. Shut-ins appeared short-lived, however, with production losses easing sharply by Monday and most output expected to be restored by the end of the month.
Supply concerns were further tempered by signs of recovery in Kazakhstan. While officials said production at the country’s largest oilfield was poised to resume, volumes remained limited and a force majeure on CPC Blend exports was still in place. The Caspian Pipeline Consortium said its Black Sea terminal had returned to full loading capacity following maintenance, offering some relief to export bottlenecks.
Geopolitical risks remained a key focus. Tensions between the U.S. and Iran continued to underpin prices after President Donald Trump reiterated warnings to Tehran and confirmed that U.S. naval forces were moving into the region, even as he expressed hope that military action would not be necessary. Iranian officials warned that any attack would be treated as an act of war, keeping risk premiums elevated.
Looking ahead, markets remain cautious as investors await greater clarity on U.S.–Iran relations, Ukraine-Russia peace efforts, and OPEC+ policy. The producer group is widely expected to maintain its pause on output increases at its upcoming meeting. Longer term, analysts warn that a sustained drop in prices could pressure U.S. shale output, particularly if OPEC moves to defend market share.