Oil prices are rebounding from $62 - is this the start of a reversal.
Crude oil prices kept sliding yesterday, but bounced off around $62 and are up more than 1% today. The jump came after PPI inflation came in way higher than expected (0.9% vs. 0.2% month-on-month), but the main focus now is on tomorrow’s Trump-Putin talks in Alaska. There’s a chance this could spark a turnaround in the recent oil price downtrend.
For oil markets specifically, these developments are worth monitoring:
- Traders focus on Friday’s Trump-Putin meeting in Alaska over a potential Ukraine ceasefire. U.S. threats of severe consequences, including tariffs on Russian oil buyers like India and China, could either tighten supply or, if sanctions ease, weigh further on prices.
- Market sentiment remains bearish amid supply glut warnings from the IEA and U.S. government, with OPEC+ output increases and U.S. inventory builds adding pressure. The IEA projects a 3 million bpd surplus by 2026, while seasonal demand is expected to weaken after the summer travel peak.
- Bank of America expects Brent crude to average $63.50 per barrel in the second half of 2025 and potentially drop below $60, driven by a projected supply surplus of 890,000 barrels per day through mid-2026. This surplus could add about 100 million barrels to global inventories, with OPEC+ supply growth outpacing demand despite improved consumption forecasts.
Conclusion
Today’s rebound in oil prices may signal a potential trend change, especially since the short-term downtrend line has been broken. Much will depend on the outcome of Friday’s meeting between Russia and the U.S., though markets will likely react on Monday.
My short-term outlook is neutral.
Here’s the breakdown:
- Crude oil has rebounded from the $63 level.
- Ongoing tariff-related volatility, U.S.-Russia peace talks, and economic data are adding to market uncertainty.
- In my opinion, the short-term outlook is neutral.
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Thank you.
Paul Rejczak,
Stock Trading Strategist
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