Oil prices rose modestly on Tuesday as investors reversed course from Monday’s steep selloff, prompted by easing supply fears and a shift in positioning. Brent crude futures climbed $0.90, or 1.4%, to $67.16 per barrel by 09:01 GMT, while U.S. West Texas Intermediate (WTI) for May delivery rose $0.97, or 1.5%, to $64.05. The more liquid June WTI contract increased $0.92, reaching $63.33.
The gains come after a more than 2% drop in both benchmarks Monday, driven by progress in nuclear negotiations between the U.S. and Iran—talks that could eventually boost global oil supply.
“Some short-covering emerged after Monday’s sharp sell-off,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities. “The fundamentals for demand remain solid.”
Monetary Policy Worries Weigh on Markets
Despite the recovery in crude prices, broader market sentiment remains fragile. U.S. President Donald Trump once again criticized Federal Reserve Chair Jerome Powell on Monday, urging immediate interest rate cuts. His remarks stoked investor fears over potential political interference in central bank operations.
These comments triggered a dip in U.S. equity markets and sent the dollar index to a three-year low. A weaker dollar typically supports commodity prices, including oil, by making them more attractive to foreign investors.
UBS analyst Giovanni Staunovo noted, “Monday’s selloff seemed overdone. With steady demand and supportive currency dynamics, a short-term rebound was likely.”
Key Market Drivers to Watch:
- Political pressure on the Federal Reserve
- U.S. dollar weakness
- Global risk sentiment across equities and commodities
Iran Talks and Russia’s Outlook in Focus
Negotiations between the U.S. and Iran have also captured the oil market’s attention. The two countries agreed over the weekend to draft a framework for reviving the 2015 nuclear deal. A successful agreement could eventually see the lifting of sanctions on Iranian oil exports, adding fresh supply to the global market.
Meanwhile, Russia has revised its 2025 Brent crude forecast downward by nearly 17% from previous estimates, reflecting expectations of moderated pricing in response to shifting global dynamics.
Weekly Oil Inventory Outlook:
- Crude Oil Stocks: Expected to fall
- Gasoline Inventories: Likely down
- Distillates: Projected increase
These figures will be confirmed in reports from the American Petroleum Institute and the U.S. Energy Information Administration later this week.
As global negotiations and policy shifts unfold, traders remain cautious but reactive, fueling volatility and short-term price swings in crude markets.