Oil Set For Weekly Gain on China Trade Deal Hope
At the time of writing, Brent crude was trading at $64.64 per barrel and West Texas Intermediate was changing hands for $61.72 per barrel, both up, albeit moderately, from the start of the week. According to Reuters, the weekly gain will be about 1%.
The modesty of the weekly gain is likely related to a couple of solid bearish new developments on the geopolitical and the forecasting fronts. On the geopolitical front, reports emerged suggesting the U.S. and Iran were closer to a new nuclear deal than they had been for months. On the forecasting front, the International Energy Agency once again injected pessimism into oil markets predicting slower than previously expected oil demand growth—despite the anticipated end to the U.S.-Chinese trade war.
Economic headwinds and record electric vehicle sales are set to materially slow down global oil demand growth for the rest of the year, the IEA said on Thursday. World oil demand rose by 990,000 barrels per day in the first quarter of 2025. But the remainder of the year will see demand growth at just 650,000 bpd, the agency said in its closely-watched monthly Oil Market Report for May.
The IEA has over the past few years built a reputation for pessimistic forecasts when it comes to oil demand—only to revise them when data from the physical market points in a different direction. In this case, we've seen a rebound in Chinese oil imports at the start of the second quarter of the year and a surge in Indian oil imports, which lifted them to an all-time high in March. In related recent news, Japanese refiners were scaling back their transition plans to refocus on oil.
By Irina Slav for Oilprice.com
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