Brent Nears $65 on Renewed Trade Optimism

Oil prices moved higher this week on hopes of new trade deals. Indeed, Donald Trump’s comments on a potential Iran nuclear deal have been the defining bearish moment of this week, however inertia from the market’s robust recovery last week, still riding high on the euphoria of not having debilitating tariffs on US imports to China.

ICE Brent has been lifted around $65 per barrel towards the end of the week, OilPrices.com reports.

With the Russia-Ukraine ceasefire negotiations dragging on, next week could see more of the same.

OPEC kept its 2025 oil demand growth forecast of 1.3 million b/d unchanged in its May monthly report, all the while trimming the outlook of non-OPEC supply growth to 800,000 b/d against the background of lower oil prices, cutting mostly US shale production.

Saudi Aramco (TADAWUL:2222) announced 34 preliminary deals with US energy companies potentially worth $90 billion during President Trump’s visit to Saudi Arabia, including multi-billion MOAs with LNG developer NextDecade and utility firm Sempra.

Amidst weakening US electric vehicle sales (just 10% in 2024), the International Energy Agency downgraded its impact assessment of oil demand replacement coming from EVs to 5.4 million b/d by 2030, down from 6 million b/d from last year’s forecast.

According to the Financial Times, the European Commission is preparing to raise tariffs on Ukraine, seeking to end the regime of duty-free imports formalized after the Russia-Ukraine war started, with Central European countries taking issue with Kyiv’s agricultural exports.

PMI, the trading arm of Mexico’s state oil company Pemex, has announced a decline in crude oil exports over the upcoming period as the long-delayed 340,000 b/d Dos Bocas refinery is finally able to receive crude and should take in some 100,000 b/d of Mexican oil.

As negotiators from Russia and Ukraine met in Istanbul this week, global trading house Mercuria Energy has reportedly built up a huge position in aluminium on the London Metal Exchange, expecting that sanctions relief vis-à-vis Moscow would tighten the market.

Italy’s oil major ENI (BIT:ENI) announced that it had entered exclusive talks with investment firm Ares Alternative Credit Management (NYSE:ARES) to sell a 20% stake in its renewables and retail unit Plenitude in a deal valued at more than $12 billion.

With benchmark LME three-month cobalt prices rising to $33,700 per metric tonne lately, the Democratic Republic of Congo could push even higher as it considers imposing stricter export restrictions after the current four-month export ban ends in June.

US oil major Chevron (NYSE:CVX) and several European upstream companies participating in Venezuelan oil projects are currently in negotiations with the Trump administration to ensure they can keep their respective stakes in joint ventures with PDVSA.

A New Jersey court found that the lawsuit filed by the Commodity Futures Trading Commission (CFTC) against trading firm My Forex Funds was unlawful and in bad faith, falsely claiming that its tax payments to Canadian authorities amounted to fraud.

Doubling down on expectations of oversupply, the International Energy Agency (IEA) has lifted global supply growth this year to 1.6 million b/d, up almost 400,000 b/d from its previous forecast, arguing that expedited OPEC+ cuts will continue over 2025.

Canada’s upstream firm Strathcona (TSE:SCR) is seeking to launch a $4.25 billion hostile takeover bid for peer oil sands producer MEG Energy (TSE:MEG), potentially making it the country’s fifth-largest producer, following a direct offer dismissal from MEG’s board.

The government of Denmark is considering lifting its ban on nuclear power imposed back in 1985, following the pro-nuclear Swedes, with Energy Minister Lars Aagaard claiming that the country cannot have a power grid ‘based on solar and wind alone’.

Under pressure from activist investor Elliott Investment Management, US refining giant Phillips 66 (NYSE:PSX) agreed to sell a 65% stake in its German and Austrian retail fuel business to private equity firms EEP and Stonepeak for $2.8 billion.