Oil Prices Edge Higher but Remain Pressured by Trade and Supply Concerns

Oil prices inched higher on Monday, but gains remained modest as uncertainty over U.S.-China trade talks and the prospect of increased OPEC+ output continued to weigh on the outlook for global growth and fuel demand.

• Brent crude futures rose 21 cents, or 0.3%, to $67.08 a barrel by 0742 GMT.
• U.S. West Texas Intermediate (WTI) crude gained 24 cents, or 0.4%, to $63.26 a barrel.

Both benchmarks marked a third consecutive session of small gains, but sentiment remained fragile.

OPEC+ Expected to Propose Faster Output Hikes

Some members of OPEC and allies (OPEC+) are reportedly preparing to recommend accelerating oil output hikes for a second straight month when they meet on May 5.

• This expectation of rising supply has pressured oil markets, especially given concerns about global demand amid economic uncertainty.
• Last week, both Brent and WTI fell more than 1%, driven by oversupply fears and trade-related growth concerns.

Mixed Signals from U.S. and China on Trade

The oil market has been rattled by conflicting reports over the status of U.S.-China trade negotiations:

• President Donald Trump suggested that talks were ongoing.
• However, U.S. Treasury Secretary Scott Bessent on Sunday did not confirm any active negotiations.
• Meanwhile, Beijing has denied that discussions were taking place.

The lack of clarity adds to worries that the protracted trade war could further slow global economic growth, curbing energy demand.

At the recent IMF and World Bank Spring Meetings, several officials said the U.S. administration’s stance on trade remains divided, contributing to broader market unease.

Geopolitical Developments

• Iran nuclear talks between Tehran and Washington continue this week in Oman.
  • Iranian Foreign Minister Abbas Araqchi expressed caution, saying he remained “extremely cautious” about the chances of reaching an agreement.
• A deadly explosion at Iran’s Bandar Abbas port over the weekend, killing at least 40 people and injuring over 1,200, raised new concerns over regional stability.
• In Europe, Trump and Ukrainian President Volodymyr Zelenskiy met at the Vatican, pressing for progress in peace talks between Russia and Ukraine.

Summary

Oil markets are currently caught between:

• Support from geopolitical risks (Middle East tensions, Russia-Ukraine talks),
• and headwinds from potential OPEC+ oversupply and economic uncertainty due to prolonged U.S.-China trade tensions.

Investors will closely watch:

• The outcome of the OPEC+ meeting on May 5,
• Progress or setbacks in U.S.-China trade relations, and
• Iran nuclear talks and broader Middle East developments.

Conclusion:
While oil prices have seen some recovery, major headwinds remain, making near-term price volatility likely as these global factors unfold.