Oil Prices Rebound Amid Optimistic Inflation Data

Brent crude rose 0.5%, reaching $73.31 per barrel, while U.S. West Texas Intermediate climbed 0.6% to $69.86. Lower-than-expected U.S. inflation data bolstered market optimism and hopes for monetary policy easing. Analysts noted that the U.S. Senate’s resolution to end the brief government shutdown also boosted confidence.

Last Week’s Decline Amid Economic and Demand Concerns

Oil benchmarks fell over 2% last week due to fears of slowing global growth and cautious Federal Reserve policies. Insights from Sinopec, predicting China’s oil consumption peak by 2027, added downward pressure on prices.

European Supply Resumes Following Pipeline Repairs

European oil supply concerns eased with the restart of the Druzhba pipeline. The critical route, halted due to technical issues, resumed delivering 300,000 barrels per day to countries including Hungary and Germany.

U.S. Policy Pressures and Global Oil Dynamics

President Donald Trump urged the European Union to increase U.S. oil and gas imports, threatening tariffs on EU exports. His controversial stance on reasserting U.S. control over the Panama Canal sparked diplomatic tensions, drawing criticism from Panama’s President.

Supply Trends and 2025 Price Forecasts

Increased U.S. oil rig activity, now at its highest since September, signals robust domestic production. However, Macquarie analysts predict a growing supply surplus in 2025. This could drive Brent crude prices down to an average of $70.50 per barrel, compared to this year’s $79.64 average.

Final Thoughts on Oil Market Outlook

While inflation optimism temporarily boosted oil prices, long-term concerns linger. Market participants must navigate the balancing act of growing supply, evolving demand, and geopolitical tensions in 2025 and beyond.