U.S. crude oil drops below $55 a barrel, hits lowest level since early 2021

Oil Prices and News

U.S. crude oil drops below $55 a barrel, hits lowest level since early 2021

Published Tue, Dec 16 2025

9:02 AM EST

Updated 1 Min Ago

thumbnailSpencer Kimball@spencekimballWATCH LIVE

Key Points

  • The oil market is under pressure this year as OPEC+ members have rapidly ramped up production after years of output cuts.
  • Investors are also pricing in lower geopolitical risk on a possible peace agreement in Ukraine.

In this article

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Oil prices held on to most gains from the previous session in early trading on Thursday as investors awaited U.S.-China trade talks later in the day.

Anton Petrus | Moment | Getty Images

U.S. crude oil on Tuesday fell below $55 per barrel, hitting the lowest level since early 2021 as traders factor in a looming surplus and the possiblity of a peace agreement in Ukraine.

West Texas Intermediate hit a low of $54.98 per barrel, the lowest level since Feb. 3, 2021. The U.S. benchmark was last trading at $55.19, down 2.87%.

U.S. gasoline prices, meanwhile, have fallen below $3 per gallon to the lowest level in four years, according to the motorist association AAA.

The oil market is under pressure this year as OPEC+ members have rapidly ramped up production after years of output cuts. Investors are also pricing in the possibility of lower geopolitical risk as President Donald Trump pressures Ukraine to accept a peace agreement with Russia.

The threat of supply disruptions has loomed over the oil market since Russia launched its full-scale invasion of Ukraine in 2022. Kyiv has launched repeated drone strikes on Russian oil infrastructure this year. The U.S. and its European allies, meanwhile, have targeted Russia's crude industry with sanctions.

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