Oil bounces on trade hopes, but OPEC drama keeps the lid tight
Oil’s staging a modest rebound this morning as the tape grabs onto signs of a potential U.S.-China tariff thaw. WTI is back near $62.86, up close to 1%, while Brent is holding above $66.50 — nothing dramatic, but enough to unwind some of Wednesday’s trade war tariff-induced flush.
The driver? Washington floated the idea that China tariffs could “come down substantially,” while Beijing called for a complete rollback, even as both sides admit formal talks haven’t kicked off. Still, the tone is shifting just enough to keep the bears from pressing.
Let’s be clear — crude’s still nursing a $10 drawdown since the early-April tariff blitz, and recession warnings are now baked into most macro models. But for today, the gloom is taking a breather.
Adding support: a chunky U.S. product draw in the latest EIA report, offering bulls a tangible reason to step back in. The data showed real inventory tightness despite soft global demand expectations — a short-term tailwind for prices.
But the upside is capped by cartel noise. Kazakhstan just shrugged off OPEC+ quotas, bluntly stating its production will follow national interests. That kind of dissent undercuts any confidence in coordinated supply management — and keeps a lid on price enthusiasm.
Bottom line: oil’s bouncing, but it’s still trapped in a tug-of-war between trade optimism and cartel dysfunction. Until one side breaks decisively, this is still a fade-the-rally, buy-the-dip kind of tape.
Author
Stephen Innes
SPI Asset Management
With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.
