Oil Steadies as IEA Cuts Demand Forecast and Warns of Surplus
Oil steadied following Monday’s tepid session, with traders monitoring the latest US moves in the tariff war and fresh warnings from the International Energy Agency over a persistent surplus.
Brent futures traded near $65 a barrel, erasing earlier gains. The IEA on Tuesday slashed its forecasts for demand this year by almost a third and predicted the oversupply will run into 2026.
Oil has dropped about $10 this month as the trade war started by President Donald Trump stoked fears of a global recession that would hurt energy demand, especially in the US and China, the biggest crude consumers. Markets stabilized on Monday after Trump suspended levies on some consumer electronics.
Concerns around the growth outlook have led agencies to cut demand views and analysts to slash price forecasts, with the possibility of a glut amplified by OPEC+’s surprise decision to bring back output more quickly than expected.
“Macro sentiment has stabilized for now, and crude is on a slow path to recovery,” said Huang Wanzhe, an analyst at Dadi Futures. “With the first wave of ‘tariff pricing’ largely baked in, markets are now gearing up for the next phase — where the focus shifts to actual demand impact as the trade war escalates, barring any policy flipflop.”
The US and Iran held nuclear discussions over the weekend that both parties characterized as constructive, in the first high-level contact since 2022. The two sides are set to meet again this week, raising the possibility of increased oil output from the OPEC member.
On the demand side, the Organization of the Petroleum Exporting Countries trimmed already its outlook for consumption over the next two years by about 100,000 barrels a day, following a larger cut by the US Energy Information Administration last week.
Brent for June settlement fell 0.1% to $64.79 a barrel by 10:07 a.m. in London.
WTI for May delivery was little changed at $61.53 a barrel
Source : Bloomberg
