The energy market kicked off 2026 on a negative note as prices worked lower on Friday. February WTI crude oil futures traded more than 50 cents lower to around $56.80 a barrel by midday. Futures have been nearing the Energy Information Administration’s price outlook for the first quarter of 2026, which is expected to hit about $51 a barrel.

Heating oil (diesel) futures traded nearly a percent lower, with prices knocking on $2.10 per gallon. Prices are also testing support levels from the Oct. 17 low.

Record U.S. production gave way to cheaper crude oil prices last year, which fell about 21 percent in 2025. There have been plenty of geopolitical risks between the Middle East, Venezuela, and the Black Sea, though supply concerns were often overshadowed by weakening demand.

OPEC+ members are meeting on Jan. 4 and are expected to reaffirm a decision to pause their supply increase during the first quarter of 2026. Weakening fundamentals could lead to the group deferring additional action until the market builds a clearer outlook for this year, according to Bloomberg analysts.

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