Oil Heads For Small Weekly Gain But Remains Under Pressure From Rising Supply
Oil prices extended losses on Friday under increasing supply pressure from rising OPEC+ output and the prospect of an Iran nuclear deal, but were headed for a second straight weekly gain as U.S.-China trade tensions eased.
Brent crude futures fell 18 cents to settle at $64.34 a barrel by 0622 GMT. U.S. West Texas Intermediate crude was down 21 cents at $61.41.
Both contracts fell more than 2% in the previous session after selling off on the prospect of an Iran nuclear deal. U.S. President Donald Trump said the United States was close to a nuclear deal with Iran, with Tehran “sort of” agreeing to its terms. However, a source familiar with the talks said there were still issues to be resolved.
A nuclear deal that lifts sanctions would ease supply risks, allowing Iran to increase oil production and find more buyers willing to buy its oil, ING analysts wrote in a note. That could bring about 400,000 barrels per day of additional supply, they said.
Despite the potential supply squeeze, both Brent and WTI are up 0.6% so far this week. Sentiment got a boost after the U.S. and China, the world’s two largest oil consumers and economies, agreed to a 90-day pause in their trade war under which both sides will sharply lower tariffs. The tit-for-tat Sino-U.S. tariffs have raised concerns about a sharp hit to global growth and oil demand.
Analysts at BMI, a unit of Fitch Solutions, maintained their forecast for Brent to average $68 a barrel in 2025 and $71 a barrel in 2026, down from $80 a barrel in 2024, citing trade policy uncertainty on the price outlook.
“While the 90-day cooling-off period opens the door to further progress in lowering trade barriers on both sides, longer-term trade policy uncertainty will cap price upside,” the analysts said in a research note.
Adding to the market’s concerns is the expected surplus. The International Energy Agency on Thursday raised its 2025 global supply growth forecast by 380,000 barrels per day, as Saudi Arabia and other OPEC+ members end production cuts.
The IEA also projected a surplus for next year, despite a slight upward revision of its 2025 global oil demand forecast of 20,000 barrels per day. Investors are also watching for signs of interest rate cuts by the U.S. Federal Reserve, which could boost the economy and oil demand.
Earlier this week, data from the U.S. Energy Information Administration showed a bigger-than-expected jump in crude stockpiles, raising demand concerns in the world’s largest oil consumer. Source: Investing.com
