Crude oil prices have seen a significant increase recently, driven by hopes of easing trade tensions between the United States and China, as well as a significant decline in US oil inventories.
Easing trade tensions support markets
US President Donald Trump announced his intention to ease tariffs on China, restoring confidence to global markets. He also confirmed that Jerome Powell would remain as Federal Reserve Chairman until the end of his term, alleviating concerns about the stability of US monetary policy. These positive statements contributed to a boost in riskier assets, including crude oil. Brent crude rose 1.8% during the day, settling at $67.99 per barrel, while West Texas Intermediate crude rose 0.9% to $64.21 per barrel.
Declining US Inventories Support Prices
Data from the American Petroleum Institute (API) showed a decline in US crude oil inventories by 4.565 million barrels for the week ending April 18, exceeding analysts’ expectations for a decrease of 800,000 barrels. Gasoline and distillate inventories also fell by 2.18 million barrels and 1.64 million barrels, respectively.
This decline in inventories indicates increased demand for oil, boosting prices in global markets.
Impact of US Sanctions on Iran
The United States has imposed new sanctions targeting Iranian oil exports, including liquefied petroleum gas (LPG) exports. These sanctions are increasing concerns about the availability of supplies in the markets, supporting higher prices.
With ongoing geopolitical tensions and declining inventories, oil prices are expected to remain elevated in the near term. However, any negative developments in the US-China trade talks could negatively impact prices.
Despite the current improvement in oil and gas prices, the energy market faces future challenges, including geopolitical tensions, changes in trade policies, and fluctuations in global demand. Therefore, it is important to monitor global developments and their impact on energy markets.
Oil rebounds, driven by easing trade tensions and declining US inventories.
Global markets are showing signs of a renewed recovery, driven by hopes of a de-escalation in trade tensions between the United States and China. President Donald Trump’s remarks also helped ease concerns about the future of the Federal Reserve Chairman. This positive sentiment pushed investors toward riskier assets, primarily crude oil.
Brent crude prices rebounded 1.8% during yesterday’s trading. The gains came after Trump confirmed that he does not intend to fire Federal Reserve Chairman Jerome Powell. This statement gave markets a boost of confidence and helped calm the uncertainty that has clouded the financial landscape recently.
In the same context, US Treasury Secretary Scott Bessent announced that the government is considering reducing some tariffs imposed on China. These statements contributed to improving the general mood in global markets and also opened the door to the possibility of revitalizing trade relations between the world’s two largest economic powers.
Decline in inventories supports crude prices
On the other hand, data from the American Petroleum Institute provided additional support to markets. The figures showed a significant decline in crude oil inventories by 4.57 million barrels. Stocks at Cushing, the US storage hub, also fell by about 354,000 barrels.
The declines didn’t stop with crude oil alone. Refined products also saw declines. Gasoline stocks fell by 2.18 million barrels, while distillates fell by 1.64 million barrels. This across-the-board decline points to increased domestic demand in the United States and reinforces expectations of stable prices in the near term.
Markets are now awaiting the US Energy Information Administration’s report, expected later today. If the numbers are consistent with the API data, prices are poised for further gains, especially with gasoline stocks recording their eighth consecutive weekly decline, indicating a seasonal improvement in demand.
European natural gas declines despite declining inventories
Despite the rise in oil prices, natural gas prices in Europe fell by 4%. This decline is attributed to growing inventories, which now reach 37% of storage capacity. Despite the relative improvement, storage levels remain below last year’s level and below the seasonal average.
The gas pricing curve (TTF) has gradually normalized. Summer contracts are now trading at a significant discount to winter contracts, reflecting growing concerns about the resilience of European demand. This gap also indicates market concerns about the EU’s ability to meet storage targets before next winter.
European discussions on Russian gas
Amid these challenges, the European Union is holding sensitive talks about imposing a ban on spot purchases of Russian gas. This move aims to reduce dependence on Moscow as a primary energy source. Proposals are scheduled to be presented to member states on May 6.
Although pipeline flows of Russian gas have declined in recent years, Russian LNG supplies to Europe have increased. European officials rule out a widespread return of Russian gas, even if an agreement is reached between Russia and Ukraine. Metals – Copper Hits Two-Week High
In metals markets, copper prices on the London Metal Exchange rose to their highest level in two weeks. The rise was supported by a weaker US dollar, which increases the appeal of US-denominated metals. Trump’s positive comments on China also helped ease tensions, giving the market an additional boost.
On the other hand, Chinese smelters continued to increase their copper production. In March, production reached 1.25 million tons, an 8.6% increase year-on-year. This growth was driven by higher prices for by-products, such as sulfuric acid and gold, despite lower processing fees.
Data from China’s National Bureau of Statistics showed that total refined copper production in the first quarter reached 3.54 million tons.
