Oil bulls finally caught a break. Brent bounced to over $65.3, snapping back 1% after a Bloomberg report hinted that China might be open to talking—if the U.S. shows more "respect" and brings in a new point man. The market, desperate for any sign of de-escalation, ran with it. West Texas Intermediate followed suit, climbing to over $61.9. Throw in a surprise GDP print from China—5.4% versus 5.1% expected—and traders had just enough to justify a short-term rally.
But zoom out and the structural cracks are hard to ignore. The International Energy Agency just slashed its 2025 demand growth forecast to 730,000 barrels/day—the weakest in five years. The culprit? Trump's tariff barrage and the retaliatory strikes it triggered, grinding global trade and energy flows to a crawl. Even China's Q1 beat came with an asterisk: a frontloaded export push ahead of incoming U.S. duties. Analysts from UBS and PVM warn the momentum won't last, and banks like HSBC and BNP Paribas are already cutting price forecasts.
Stateside, inventory data muddied the picture further. Crude stockpiles jumped 2.4 million barrels, while gasoline and distillate supplies fell—signaling uneven demand recovery. And despite this week's bounce, oil's still down 13% for the month. Unless the U.S. and China seriously pull back from the brink, demand won't catch up fast enough to offset rising OPEC+ supply. The price floor may be in—but the ceiling just keeps getting lower.
