Crude oil edged more than 2% higher on Wednesday, driven primarily by hopes that tensions will ease in the U.S.-China trade conflict and U.S. inventory data.
At 1:28 p.m. ET, Brent crude was trading up 2.09% at $66.02, while the U.S. benchmark, West Texas Intermediate (WTI), was trading up 2.12% at $62.63.
A weaker U.S. dollar, bullish inventory data, and renewed hopes for easing U.S.-China trade tensions are all boosting crude today, particularly following a Bloomberg report suggesting China may be open to trade talks—pending specific actions from the Trump administration.
China reportedly expects the U.S. to moderate critical rhetoric from cabinet members as a precondition for negotiations.
Energy markets also responded to today’s bullish U.S. Energy Information Administration (EIA) inventory report, which showed an increase of 500,000 barrels during the week ending April 11.
Crude oil prices were trading up prior to the crude data release by the U.S. Energy Information Administration after a sharp dip over the last couple of weeks in the wake of the tariff war that has analysts worrying about recession.
Also on Wednesday, the EIA said in its Annual Energy Outlook 2025 that U.S. crude oil production was set to peak at around 14 million barrels per day in 2027, where it will remain until the early 2030s, after which point it will decline faster through 2050.
Despite bullish inventory and mere hopes that the trade war will not escalate, global economic concerns look set to put significant limitations on how far crude could climb in this climate. The World Trade Organization (WTO) slashed its 2025 global trade growth forecast from +3.0% to -0.2%, citing escalating tariff risks. If the U.S. proceeds with reciprocal tariffs, global trade could shrink by as much as -1.5%, raising fears of reduced energy demand.
Source: By Tom Kool from Oilprice.com