Oil Set For Weekly Gain on China Trade Deal Hope

Irina Slav reported on May 16, 2025, that crude oil prices are poised to increase for the week as optimism grows over a potential trade deal between the United States and China. The International Energy Agency (IEA) has projected a deceleration in global oil demand growth for the rest of the year due to economic factors and the growing popularity of electric vehicles. Recent developments include a rebound in Chinese oil imports, a surge in Indian oil imports, and Japanese refiners reevaluating their low-carbon investment strategies to focus on oil.

The rise in crude oil prices this week follows a series of declines, driven by news of a ceasefire in the U.S.-China trade war. This development raised hopes for a resolution that would benefit both countries and end the tariff dispute. As of the latest update, Brent crude was trading at $64.64 per barrel, and West Texas Intermediate was at $61.72 per barrel, showing a slight increase from the beginning of the week. The expected weekly gain is around 1%, according to Reuters.

Despite these positive indicators, the modest increase in oil prices may be influenced by recent geopolitical and forecasting news. Reports suggested progress in a new nuclear deal between the U.S. and Iran, while the IEA’s projection of slower oil demand growth added to the cautious sentiment. Economic challenges and the growing popularity of electric vehicles are expected to significantly impact global oil demand growth in the coming months, with the IEA forecasting a slowdown from the first quarter to the remainder of the year.

The IEA, known for its conservative oil demand forecasts, noted a rebound in Chinese and Indian oil imports at the beginning of the second quarter, along with Japanese refiners shifting their focus back to oil. Irina Slav provided this update for Oilprice.com, highlighting the changing dynamics in the oil market amidst global economic and geopolitical developments.