Trading Update 11th May 2025

Oil Market Weekly: Brent Crude Swings on Trade Talks and OPEC+ Shifts

The oil market saw sharp swings last week, driven by fresh supply forecasts, political headlines and shifting demand sentiment. Brent crude prices moved between $61.12 and $63.91 per barrel as traders reacted to output changes from OPEC+, geopolitical risk in the Middle East, and trade talks between the US, China and the UK.

Equity markets also responded to oil’s volatility, as energy stocks rallied midweek before slipping again. Brent’s performance remains tightly linked to investor sentiment, creating risk and opportunity for spread betting traders.

Let’s look at what moved the oil market in the last seven days.

Brent Crude Price Movements

Brent crude opened the week on a weaker note following news that OPEC+ planned to raise output more aggressively than expected. Traders were already cautious, and this added pressure to prices. On Monday, Brent stayed below $62 as the market digested the shift in policy.

By Tuesday, the mood changed. Stronger economic data from Europe and a surprise rise in industrial demand from China pushed Brent up by more than 3%. Prices climbed to $62.15 as buying momentum returned.

Midweek, hopes of a breakthrough in US–China trade negotiations were dented by political posturing on both sides. As a result, oil dipped back to $61.12 on Wednesday, reflecting nervousness about long-term demand.

Later in the week, prices stabilised after encouraging comments from US and UK officials about progress in trade talks. Brent rose to $62.84 by Friday, buoyed by renewed optimism and signs of tighter refined product supply in Asia. The week ended with Brent at $63.91, its highest level in nearly two weeks.

Global Political Drivers

Political developments were a significant influence on oil prices throughout the week.

OPEC+’s decision to accelerate production increases surprised the market and triggered a reassessment of the supply outlook, which weighed on prices early in the week.

Tensions between the US and China intensified after further tariff threats were issued. However, towards the end of the week, more conciliatory language suggested that both sides were preparing to resume talks, which helped stabilise sentiment.

Meanwhile, the UK announced a revised trade deal with the US, reducing its tariffs on American goods while the US maintained higher tariffs in return. This uneven arrangement had a limited effect on oil prices but added to the broader economic narrative.

Middle East Risks

Ongoing instability in the Middle East kept oil traders on edge. Israeli airstrikes on militant sites in Yemen, linked to Iran, raised concerns about shipping disruptions in the Red Sea and Persian Gulf.

Although the US briefly considered airstrikes in support, it backed down, avoiding a direct escalation. These tensions added a modest risk premium to oil prices, helping Brent stay above the $61 mark despite bearish pressure from supply increases.

Impact on Stock Markets

Oil prices had a visible impact on global stock markets last week. The strong midweek rebound in Brent lifted energy shares, with the S&P 500 Energy Index and FTSE 350 Oil & Gas sector both posting gains.

However, when oil dipped again midweek, investor appetite for equities also cooled. The close relationship between oil and equity markets was evident, with Brent acting as a bellwether for risk appetite.

For traders, the high correlation between oil and stock indices offered potential opportunities for spread bets across multiple asset classes.

Saudi Aramco’s Earnings and Budget Pressure

Saudi Aramco reported a drop in quarterly profits, reflecting lower oil sales and rising production costs. Free cash flow declined, and the company reduced its performance-based dividend payout.

Despite the weaker results, Aramco confirmed it would raise capital spending in line with Saudi Arabia’s long-term development goals. However, the country now needs Brent crude to be near $92 to balance its national budget, which is well above current prices.

This budget pressure could influence future OPEC+ decisions and Saudi production policy, making it an essential factor to watch.

What This Means for Spread Bettors

For spread bettors, last week’s price action created various tactical opportunities. Brent crude traded within a well-defined $61 to $64 band, offering clear entry points for short-term positions.

The return of political volatility, particularly around trade and the Middle East, makes oil a responsive and reactive market. This is ideal for intraday and swing traders using technical analysis and tight risk controls.

Key price levels include support around $61 and resistance near $64. A confirmed break above or below could signal a new short-term trend.

Technical and Sentiment Insights

Brent crude reclaimed its 50-day moving average by Friday, suggesting a potential shift in short-term momentum. The Relative Strength Index briefly moved into oversold territory early in the week, which helped spark the midweek rally.

Sentiment among traders remains cautious, with many still holding net short positions. This leaves the market vulnerable to short squeezes if new bullish catalysts emerge.

Watch out for shifts in positioning and momentum indicators—they could signal the next move before fundamentals catch up.

Seasonal and Weather Factors

Weather conditions have remained mild in key regions, with temperatures between 15 and 20 °C (59 and 68 °F). This has kept heating oil demand steady but not exceptional.

Meanwhile, refinery maintenance in Asia has temporarily reduced the output of refined products. This tighter supply has helped support crude demand slightly, especially for lighter blends suitable for gasoline production.

These seasonal dynamics will likely continue over the coming weeks, keeping product margins firm and helping to balance crude markets.

Final Thoughts

The oil market last week was shaped by rising supply, geopolitical risks, and trade policy shifts. Brent crude found support above $61 and pushed toward $64 on improving sentiment.

For spread betting traders, this combination of volatility and defined price ranges offers fertile ground for tactical trades. Watch for updates from OPEC+, developments in US–China trade talks, and signs of renewed Middle East tension.

Brent remains a barometer of global risk appetite and will likely stay active in the weeks ahead. Stay nimble, manage risk carefully, and watch breaking headlines that could shift the market mood.

Keep an eye on the oil prices here.