Crude oil prices are poised for a weekly gain, driven by news that the U.S. government has imposed new sanctions on Chinese companies involved in oil trading with Iran.
This week’s trading ends a day early, ahead of Good Friday and the Easter holidays.
As of today, Brent crude was trading at $66.41 per barrel, while West Texas Intermediate (WTI) was at $63.19 per barrel, both showing increases from earlier in the week.
Oil market news this week has been mixed, but bullish factors have largely dominated. The U.S. sanctions on Iran are one of the main drivers behind the recovery in oil prices. Another contributing factor is a forecast from the International Energy Agency (IEA), which predicts weaker-than-expected oil supply growth this year.
In its latest monthly oil report, the IEA stated that global oil supply would rise by 1.2 million barrels per day (bpd) in 2025, which is 260,000 bpd lower than its previous estimate. The agency attributed this downward revision to reduced oil production in the U.S. and Venezuela.
IG analyst Tony Sycamore told Reuters that the rally in oil prices is likely due to several factors, including shorts covering, a weaker U.S. dollar (which makes crude cheaper), and increased U.S. pressure on Iran. However, Sycamore also pointed out that there are some bearish factors, such as the potential for flat U.S. growth and slowing Chinese GDP growth, which could negatively impact oil demand.
Meanwhile, analysts from ING noted the impact of rising tariffs on oil’s outlook, suggesting that the ongoing uncertainty between the U.S. and China is creating significant challenges for global growth and, by extension, oil demand.
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