Lagos — The crude oil market experienced a notable price increase, driven by renewed optimism surrounding the upcoming trade negotiations between the United States and China. This surge led to a rebound in Brent crude, which reached around $62.90 per barrel, and West Texas Intermediate (WTI), which rose to $60.00 per barrel.
The talks between the world’s two largest economies aim to ease trade tensions that have significantly impacted the global economy, particularly the energy market. Investors hope that progress in these negotiations will help stabilize global crude oil demand, which has been affected by uncertainty and tariffs.
However, despite this rebound, analysts warn that volatility will continue to affect crude prices. Tariffs and potential further friction between the powers could continue to cause sharp market movements, hindering a sustained recovery in the short term.
Adding to this scenario is the recent announcement of a new trade agreement between the United States and the United Kingdom, which includes tariff adjustments that could also impact international trade and, consequently, the energy sector. Such agreements are attempts to strengthen bilateral relations amid a still uncertain global context.
Meanwhile, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have increased production, which could put downward pressure on prices if supply outpaces demand. This factor introduces additional uncertainty regarding the crude oil market’s direction in the coming weeks.
In the same context, Citi Bank lowered its short-term forecast for Brent, reflecting a more cautious outlook on current developments. Additionally, a potential nuclear deal with Iran could bring more crude back to the market, depending on whether the agreement is reached, directly impacting price dynamics.
In conclusion, while the recent rise in crude oil prices reflects improved market sentiment regarding international negotiations, risks remain. Geopolitical factors, OPEC+ production decisions, and agreements such as the potential nuclear deal with Iran will continue to shape the energy market, which remains highly sensitive to global developments.”
*Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS
