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On Tuesday, oil prices experienced an increase as investors capitalized on the previous day’s declines to cover their short positions. However, concerns remain regarding economic challenges posed by tariffs and US monetary policy, which may negatively impact fuel demand.
Brent crude futures rose by 90 cents, or 1.4 percent, reaching $67.16 per barrel by 0901 GMT. The US West Texas Intermediate crude contract for May, set to expire on Tuesday, increased by 97 cents, or 1.5 percent, to $64.05. The more actively traded WTI June contract also saw a rise of 92 cents, or 1.5 percent, reaching $63.33. Both Brent and WTI benchmarks had fallen over 2 percent on Monday, as indications of progress in nuclear negotiations between the US and Iran alleviated supply concerns. ‘Some short-covering emerged after Monday’s sharp sell-off,’ stated Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
On the same day, US President Donald Trump reiterated his criticism of Federal Reserve Chair Jerome Powell, suggesting that the US economy could decelerate unless interest rates were reduced promptly. His remarks regarding Powell heightened concerns about the Fed’s autonomy in determining monetary policy and the future of US assets. Major US stock indices declined, and the dollar index fell to a three-year low on Monday.
‘The price drop on Monday seemed somewhat excessive to me, given that oil demand remains robust, so we may witness a reversal today,’ commented UBS analyst Giovanni Staunovo. Progress in discussions between the US and Iran, which agreed on Saturday to begin formulating a framework for a potential nuclear agreement, could also lead to Trump reconsidering his efforts to restrict the oil exports of the Middle Eastern nation. Additionally, Russia’s economy ministry has revised its forecast for the average price of Brent crude in 2025 downward by nearly 17 percent from its previous estimate in September.
According to a preliminary Reuters poll released on Monday, it was anticipated that US crude oil and gasoline reserves decreased last week, whereas distillate stocks are expected to have increased, prior to the forthcoming weekly reports from the American Petroleum Institute and the Energy Information Administration.
