Trading Update 25th May 2025

Weekly Oil Market Wrap: Brent Crude Slips Amid Global Uncertainty

The oil market faced another turbulent week, with Brent crude prices fluctuating between $61 and $66 per barrel. Traders reacted to shifting supply expectations, political uncertainty, and economic signals that influenced demand forecasts. Despite signs of optimism late in the week, crude prices ended lower overall, highlighting the market’s current volatility.

Let’s take a closer look at the key movements in the Brent crude oil price, how it affected global stocks, the geopolitical events shaping the energy landscape, and what spread bettors should be watching in the days ahead.

Brent Crude Price Movements

Brent crude began the week trading at around $64.29 per barrel. Signs of higher US refinery activity and larger-than-expected inventory levels triggered early losses. These developments raised fresh concerns about oversupply, particularly as demand growth remains uneven.

By midweek, oil prices dropped to a one-week low of $62.10 as traders responded to reports of diplomatic progress in the Middle East. News of possible output increases from key oil-producing nations further weighed on sentiment. Discussions of additional barrels from OPEC+ members, as well as higher exports from North Africa and Central Asia, continued to put pressure on prices.

On Friday, however, prices saw a modest rebound. Traders covered short positions ahead of the US Memorial Day weekend, anticipating increased fuel demand. Brent crude finished the week at around $63.25, still down roughly 3% compared to the previous Friday’s close.

Stock Market Reaction

Oil price volatility spilled over into equity markets. Energy stocks took a hit midweek as falling crude prices hurt profit outlooks for both producers and refiners. Shares of large oil companies dipped 1.5% to 3% over several sessions, with smaller exploration and production firms seeing even sharper losses.

By Friday, some of those losses had been clawed back. Oilfield service stocks and integrated majors showed signs of stabilisation as Brent prices recovered. Despite this late-week rally, energy as a sector still underperformed broader indices such as the FTSE 100 and S&P 500, which were supported by stronger showings from technology and consumer discretionary stocks.

Political Influences on Oil Prices

Geopolitical developments had a significant impact on sentiment throughout the week. Tensions between the US and China resurfaced, as trade rhetoric heated up and fears of fresh tariffs resurfaced—this injected uncertainty into global growth forecasts, which in turn cast a shadow over expected oil demand.

At the same time, news of resumed talks between the US and Iran suggested a possible easing of sanctions. The potential return of Iranian crude to global markets added to bearish pressure, even though any real deal remains weeks or months away.

Meanwhile, OPEC+ discussions remained ongoing, with members debating whether to increase production levels in July. The possibility of further output increases continues to hang over the market, particularly as demand recovery has yet to accelerate consistently across key regions.

Economic Indicators and Supply Outlook

On the data front, US crude inventories rose unexpectedly during the week. This increase suggested weaker demand and confirmed concerns that refiners were producing more fuel than the market could absorb. The result was renewed selling pressure on oil prices.

Global agencies also revised their supply forecasts. Non-OPEC production is expected to grow faster than previously thought, with increased output from the US, Brazil, and Canada. At the same time, rising costs for rigs and drilling equipment may limit production growth in some areas, particularly in US shale regions.

Investors also paid close attention to macroeconomic signals, including inflation data and interest rate guidance from central banks. These indicators helped shape expectations around future fuel demand, especially as rising borrowing costs could dampen consumer spending and industrial activity.

Spread Betting Opportunities and Strategy

For spread bettors, this week presented several tactical opportunities. The key support level around $61.50 proved a reliable entry point for traders buying the dip, while resistance near $64.50 offered a sensible place to book profits or consider short positions.

Short-term traders could focus on technical plays, such as range trading or breakout strategies based on inventory data or headlines from OPEC. Longer-term players may prefer to position around geopolitical developments, especially any news related to Middle East tensions or trade negotiations.

Pair trading strategies also gained traction. For example, going long on defensive energy stocks while shorting high-beta exploration firms allowed traders to hedge market risk while targeting relative performance differences.

Volatility remains elevated, so using smaller position sizes and setting clear stop-loss levels is critical. With oil trading heavily driven by news flow, unexpected developments can significantly move prices in either direction.

Looking Ahead

The week ending 25th May 2025 highlighted the oil market’s continued sensitivity to global news and shifting fundamentals. With supply forecasts rising and demand recovery still patchy, traders will need to stay alert to changes in sentiment and policy.

Brent crude’s performance next week may hinge on several key factors: whether OPEC+ confirms a production increase, how US demand trends over the long weekend, and what signals emerge from trade and geopolitical talks.

For spread bettors, the current environment presents both opportunities and risks. A disciplined approach, backed by solid analysis and clear trading plans, will be crucial in maximising returns in volatile markets like these.

Keep an eye on the oil prices here.