Trading Update 18th May 2025

Weekly Oil Analysis: Brent Crude Holds Firm Amid Mixed Signals

The oil market experienced a turbulent week from May 11th to 18th, 2025, as Brent crude prices fluctuated in response to shifting geopolitical events, supply forecasts, and economic signals. While the price range remained relatively narrow, several factors triggered sharp daily moves. For traders and spread bettors, understanding what drove those fluctuations is key to spotting future opportunities.

Brent Crude Prices: A Week of Two Halves

Brent crude opened the week at just under $65 per barrel and experienced a mild downward drift. Prices dropped below $64 by mid-week, driven by a mix of bearish signals. However, as sentiment shifted and traders reassessed the global picture, Brent rebounded to close the week at around $65.40.

The early weakness came from news suggesting a potential nuclear agreement between the United States and Iran. Markets feared this could lead to more Iranian crude hitting the global supply chain, weighing on prices. That fear, coupled with a surprise increase in U.S. crude inventories, sent prices lower mid-week.

But oil rallied late in the week, helped by positive economic signals, easing trade tensions, and optimism around global demand forecasts. The net result was a fairly stable price range, though intraday volatility gave active traders plenty to work with.

Energy Stocks React to Price Moves

Stock markets showed mixed reactions to the week’s oil price movements. Energy shares underperformed as crude struggled mid-week. Major oil producers in the U.S. and Europe lost ground, as investors priced in weaker short-term margins.

In contrast, technology and financial stocks held up well. Strong earnings from some of the big tech names and easing inflation fears kept broader indices supported. Still, oil-sensitive sectors, such as energy services and refiners, were under pressure. The week’s price rebound came too late to lift sentiment fully.

This divergence created an interesting setup for spread bettors. While headline indices moved sideways, sector-specific trades offered more action. Those shorting oil-linked shares mid-week could have captured decent moves before the Friday recovery.

Geopolitics Steer the Narrative

Politics remained a major driver in the oil market, with attention focused squarely on the Middle East and key producer nations. The potential for a new U.S.–Iran nuclear deal dominated headlines. Even the suggestion of renewed talks triggered concerns about a potential surge in supply from Iran if sanctions were lifted.

At the same time, OPEC and its allies offered some support to prices by cutting their forecast for supply growth outside the group. Slower investment and stricter capital discipline in the U.S. and Latin America were cited as reasons for the adjustment.

Also influencing sentiment were talks between the U.S. and China. The two nations made progress on reducing tariffs, which in turn boosted expectations for stronger global trade. That’s bullish for oil, as a healthier global economy means more demand for transport and manufacturing fuels.

Finally, tensions eased in a few hotspots, including North Africa, where production had been disrupted in recent weeks. Libya’s oil fields came back online, adding more supply to an already well-stocked market.

Economic Data and Demand Forecasts

Oil traders also closely monitored economic indicators and agency forecasts. The International Energy Agency has slightly increased its global demand expectations, citing better-than-expected economic activity in Asia and a continued recovery in air travel.

Meanwhile, the U.S. Energy Information Administration data showed an unexpected build in domestic crude inventories. That pointed to weaker short-term demand or simply logistical backlogs, depending on interpretation. Either way, it contributed to price weakness early in the week.

On the consumption side, mild temperatures across Europe and North America kept heating demand subdued. Most significant cities saw average daytime highs in the 15–20°C (59–68°F) range, reducing the urgency for restocking fuels like diesel and heating oil.

Looking forward, seasonal maintenance at refineries and the start of the northern hemisphere driving season could shift the supply-demand balance again. Spread bettors should monitor these trends as summer approaches.

What This Means for Spread Bettors

For those trading oil or oil-related stocks via spread betting, last week highlighted the importance of staying on top of news flow. Intraday moves were driven by headlines more than data, resulting in a week where reactivity prevailed over long-term positioning.

The Brent crude range of $64–66 offered clear support and resistance levels. That created opportunities for short-term swing trades. With news-driven volatility, short positions on rallies and long positions on dips both worked when timed right.

Oil stocks also diverged sharply from the broader market. Traders who focused on sector pairs – going long tech against short energy, for example – could find relative value.

Geopolitics remain the most unpredictable driver. If U.S.–Iran negotiations continue to progress, further downside risk exists. However, supply discipline from OPEC+ and steady demand growth provide a counterweight. That tension is likely to define trading conditions over the next few weeks.

Key Levels and Events to Watch Next Week

Looking ahead, Brent crude is expected to face resistance near $66 and support around $63. Breakouts beyond either level will likely need a catalyst.

On the data front, traders should watch the next set of U.S. inventory figures. Another unexpected build could pressure prices. Conversely, signs of refinery demand picking up would support the bullish case.

Politically, any firm announcements on sanctions relief for Iran could quickly shift the market outlook. So far, all movement has been based on speculation. A signed agreement would have a more lasting impact on sentiment.

Also worth tracking are updates from OPEC members on compliance with production quotas. Markets will react quickly to any evidence of overproduction or cheating within the group.

Final Thoughts

The week of May 11th to 18th, 2025, was a reminder that oil markets rarely move in a straight line. Political negotiations, shifting supply expectations, and global economic signals all played their part. For traders using spread betting platforms, these kinds of environments offer opportunity ﹘ but also demand discipline and fast reactions.

Whether you’re trading crude itself or related equities, keeping an eye on key news events and technical price levels is essential. With volatility set to remain high, the oil market continues to be one of the most active spaces for short-term traders.

Keep an eye on the oil prices here.