Oil Steadies As Gunvor Thinks Reaction To Trump Tariffs Was "Too Aggressive"

However, OPEC still sees demand reduction for this year and next: File Image/Pixabay

Oil prices appeared to stabilize on Monday, as some analysts swung back to their original positive view of U.S. president Donald Trump's tariff pause and weekend talks between the U.S. and Iran were viewed as constructive.

Brent settled up 12 cents at $64.88 per barrel, while West Texas Intermediate settled up 3 cents at $61.53.

Analysts reassessed the tariffs situation when it was learned that Washington had granted exclusions from steep tariffs on smartphones, computers and other electronic goods from China.

Meanwhile,  officials said the U.S. and Iran held "positive" and "constructive" talks over the weekend, the aim being to pressure the latter into abandoning its nuclear programme – which caused ING analysts to write in a note, "This may help remove some of the sanction risk affecting the oil market, particularly if talks keep on moving in the right direction."

Both sides agreed to meet again in the near future.

But the perception remains that Trump's tariff strategy, while intended to re-jig free trade under more equitable guidelines, has done more harm than good, and JPMorgan Chase & Co. noted that investors pulling out of crude and fuel markets triggered a $2 billion net outflow in the week ending April 11.

Bloomberg added, "There have also been unusual declines in the US dollar and Treasuries, assets that typically function as havens during periods of stress."

But for his part, Frederic Lasserre, head of Gunvor's research &analysis team, believed the markets have overreacted; he said, "Not only on oil, but on equities people were pricing a global recession.

"I think this was a bit too aggressive, at least for now, and from here I see a bit more upside than downside because I feel there is a better exit than the zero-growth situation."

Lasserre also pointed out that if there were to be no demand growth this year as some pundits have predicted, then nearby timespreads wouldn't be trading in a bullish pattern and refining margins would have weakened further.

Still, pessimism lingered near the surface on Monday, with the Organization of the Petroleum Exporting Countries (OPEC) revising its global oil demand growth forecast for 2025 to take into account the tariff tensions; the cartel now anticipates a demand increase of 1.3 million barrels per day (bpd) for 2025, down 150,000 bpd from its previous projection, and it also adjusted downward its 2026 forecast to 1.28 million bpd.