Oil prices rose by 1% on Friday, concluding the week on a stable note as prospects of a potential ceasefire between Ukraine and Russia relieved the markets. The possibility of a ceasefire in the ongoing Ukraine conflict was bolstered after Russian President Vladimir Putin suggested changes to the U.S. ceasefire proposals. This development has created a cautiously optimistic atmosphere among investors.
COLUMN: Despite a ~$30-a-barrel sell-off over the last 18 months, I'm still (somewhat) bearish.
The oil market and the industry face significant headwinds – above all: OPEC+ is boosting output and Trump wants much lower prices.@Opinion #OOTT #CERAWeek https://t.co/dC8k0c4ob2
— Javier Blas (@JavierBlas) March 17, 2025
Meanwhile, the International Energy Agency (IEA) has projected that global oil supply will surpass demand by 600,000 barrels per day (bpd) in 2025. This forecast contributes to a complex backdrop for oil prices, balancing geopolitical tensions and supply and demand fundamentals. In the United States, the number of active oil rigs has increased by one this week, according to energy services firm Baker Hughes.
This slight uptick in rig count signals a potential for modest growth in U.S. oil production.
OIL MARKET: Goldman Sachs cuts its oil price forecast for 2025 and 2026 on higher OPEC+ output and lower economic activity. The bank now sees Brent crude in a $65-$80 a barrel price range (vs $70-$85 before) #OOTT
— Javier Blas (@JavierBlas) March 17, 2025
The S&P 500 closed in correction territory on Monday, with the Dow and Nasdaq also falling.
The stock market retreat was driven by another flare-up in the tariff saga as President Trump threatened 200% duties on European wine and other alcoholic beverages in response to the EU’s retaliatory tariff on American whiskey. The tariff back-and-forth hitting equities has filtered into the oil market, along with concerns about the longer-term impact on economic growth and demand. That has coincided with talks for a ceasefire in the Russia-Ukraine war, which could lead to additional Russian oil on the market.
Goldman cuts oil price views on slower demand growth expectations, higher OPEC+ supply https://t.co/ldq4SOQJq0
— Patrick De Haan (@GasBuddyGuy) March 17, 2025
Oil prices rise amid ceasefire talks
The IEA cited trade tensions in cutting its 2025 oil demand growth forecast to 1.03 million barrels a day from 1.1 million b/d. WTI settled down 1.7% at $66.55 a barrel, and Brent fell 1.5% to $69.88 a barrel. Gold neared the $3,000/oz mark as equities fell, while Treasury yields and the dollar lost steam as U.S. producer prices cooled.
Jobless claims also fell last week, providing some positive news on the economic front.
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