Crude oil prices are on track to snap a three-week losing streak, supported by rising fuel demand and easing concerns over a global trade war. Both Brent crude and U.S. West Texas Intermediate (WTI) gained approximately 1% for the week, as investors reacted to a more measured approach from Washington on tariff policies.
U.S. President Donald Trump ordered officials to review reciprocal tariffs on countries imposing duties on U.S. goods, with recommendations due by April 1. This delay has calmed market fears, boosting risk appetite and supporting oil prices.
Russia-Ukraine Peace Talks Weigh on Market Sentiment
Despite the positive trade developments, the oil market remains cautious over potential supply shifts from Russia. Market strategist Yeap Jun Rong noted that while optimism on trade may lift crude prices, the possibility of Russian oil returning to the market could cap gains. Any lifting of sanctions on Moscow in the event of a peace deal between Russia and Ukraine would significantly increase global energy supply, potentially pressuring prices.
Trump has reportedly initiated talks to broker an end to the conflict, following separate discussions with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy. Traders are closely watching these developments, as any resolution could alter supply dynamics.
Stronger Demand Outlook Supports Prices
Oil demand is expected to climb due to increased heating fuel consumption and a potential shift from gas to oil in Europe. Soaring natural gas prices across the continent could drive industrial and power generation sectors to rely more on crude-based alternatives. This shift, combined with seasonal heating demand, is likely to offer near-term support for prices.
Market Outlook: Cautiously Bullish
With trade tensions easing and demand set to rise, oil prices have room for further gains. However, any breakthrough in Russia-Ukraine peace negotiations and the potential return of Russian supply could limit upside momentum. Traders should monitor price action closely, with a bullish bias above $71.51 and downside risks increasing below $70.67.