May 1, 2025

Oil Steadies After Drop Amid Trade War and Iran Talks ๐Ÿ›ข๏ธ๐ŸŒ

Oil prices steadied after a recent decline, with investors closely watching signs of strain in the US economy and developments in nuclear talks with Iran.

๐Ÿ”น Market Snapshot:

  • Brent crude (BZ=F) slipped below $66 a barrel after falling 1.5% on Monday.
  • West Texas Intermediate (CL=F) hovered near $62.

US manufacturing activity weakened significantly, highlighting the economic drag from President Trump’s tariffs. More economic data due this week is expected to provide deeper insights.

๐Ÿ”น Geopolitical Focus:

  • Talks between Washington and Tehran show progress, raising the possibility of easing sanctions on Iranian oil.
  • Iran is also presenting its sanctioned economy as an investment opportunity to US businesses.

๐Ÿ”น Oil Market Dynamics:

  • Brent crude is heading for its largest monthly drop since August 2022, pressured by Trump’s escalating tariffs and OPEC+ plans to ramp up production.
  • While many nations are negotiating with Washington, Beijing remains on the sidelines.

๐Ÿ”น Signs of Market Tightening:

  • Market metrics show tightening in April: Brentโ€™s spread between the June and July contracts widened in backwardation, with the June contract trading at a premiumโ€”the strongest in nearly three months.

๐Ÿ”น European Blackout:Spain and Portugal suffered Europe’s worst blackout in years, forcing several Spanish oil refineries to halt operations. Power is now gradually being restored.

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