Oil Market Recovers Slightly After Recent Losses
The oil market experienced a modest recovery as traders digested mixed signals from global policymakers. West Texas Intermediate (WTI) crept closer to $62 per barrel, buoyed by a tech stock rally following President Trump’s decision to delay some tariffs on electronics.
Although the pause helped calm markets, Trump reiterated that more duties are still planned. This cautious optimism lifted sentiment in the energy sector, which had been weighed down by fears of recession and oversupply.
Iran Talks Offer Glimmer of Supply Hope
One of the more constructive developments came from diplomatic talks in Oman between US and Iranian officials — their first high-level engagement since 2022.
Both sides agreed to continue discussions, potentially easing tensions over Iran’s nuclear program. If sanctions are relaxed, Iranian oil exports could resume, boosting global supply and reshaping market dynamics.
Demand Outlook Faces Major Revisions
While geopolitical dialogue offers some optimism, the demand side remains a concern. OPEC recently cut its 2025 oil demand forecast by 100,000 barrels per day, echoing earlier reductions by the US Energy Information Administration (EIA).
JPMorgan now projects Brent crude to average $66 per barrel in 2025, down from earlier estimates. Meanwhile, Goldman Sachs anticipates an oversupply of nearly 800,000 barrels per day, citing aggressive OPEC+ output increases and softer global consumption.
Trade War Still a Cloud Over Oil Markets
April has been rough for crude prices, largely due to renewed US-China trade tensions. While a brief pause in some tariffs has lifted spirits, tariff threats persist, particularly on tech and automotive sectors that drive oil demand.
The market is also reacting to supply-side pressures, including OPEC+’s surprise decision to accelerate output increases. These factors continue to create bearish pressure on oil futures and related equities.
Analysts Signal Cautious Outlook
Despite the slight uptick in prices, most analysts remain cautious. Goldman Sachs forecasts Brent crude to average $63 per barrel for the rest of 2025, while others warn of extended volatility due to uncertain global growth and inventory builds.
Unusually, traditional safe havens like US Treasuries and the dollar have also come under pressure, indicating deeper market stress. This could limit capital flows into commodities and further temper oil price rallies.