Oil & Gas

Oil prices remained relatively stable this week, with Brent crude futures rising by 0.1% to $64.95 per barrel and U.S. West Texas Intermediate crude also up 0.1% to $61.60. This stability was influenced by U.S. President Donald Trump's indication that he might modify the 25% tariffs on foreign auto imports from Mexico and other countries. This news, along with ongoing U.S. trade policy uncertainty, has created volatility in global oil markets, prompting OPEC to lower its oil demand forecast for the first time since December. The uncertainty around tariffs continues to shape investor sentiment, making market trends harder to predict.

The International Energy Agency (IEA) followed OPEC’s lead by revising its oil demand growth forecast for the year down to 730,000 barrels per day (bpd), down from an earlier forecast of 1.03 million bpd. The agency also lowered its demand forecast for next year to 690,000 bpd, citing escalating trade tensions as a key factor. These cuts reflect concerns over the broader global economic slowdown and its potential impact on oil demand. Despite this bearish outlook, the market is also reacting to some positive data from China, where crude oil imports in March were up nearly 5% year-on-year, driven partly by an increase in Iranian oil arrivals.

Geopolitical factors also played a role in stabilizing prices. U.S. Energy Secretary Chris Wright indicated that the U.S. may consider halting Iranian oil exports as part of broader pressure on Tehran regarding its nuclear program. Additionally, Kazakhstan reported a 3% decline in oil output in the first half of April, further tightening supply. However, despite these fluctuations in production, Kazakhstan's output remains well above its OPEC+ quota. These complex dynamics are balancing out in the oil market, with rising demand from China and supply concerns creating a counterweight to the demand forecast cuts from OPEC and the IEA.