Brent at $65 Again Longing Sideways

Brent crude prices rose by 3.5% to $65.40 per barrel, largely returning to the average level seen over the past two months. Despite a series of political and economic developments, no single event has had a decisive impact on the oil market. On May 28, Brent climbed 0.8% to $64.85 following the U.S. Court of International Trade’s decision to overturn proposed tariff hikes. However, after the U.S. Appeals Court reinstated those tariffs, prices slid by 1.5% to $63.89. Subsequent comments from President Donald Trump accusing China of violating preliminary trade agreements triggered another 1.1% drop to $62.59.

Over the weekend, attention shifted to the OPEC+ meeting, where concerns had grown about a possible 411,000 bpd production increase starting in July. These fears were not realized, and markets responded with a 1.0% gain to $63.80 when trading opened on Monday. A statement from Iranian Foreign Minister Abbas Araghchi followed, indicating Iran would likely reject a new nuclear deal, suggesting no near-term boost in global oil supply. This pushed Brent higher by another 3.6% to $66.14.

Meanwhile, U.S. crude inventories fell by 4.30 million barrels, significantly more than the expected 2.90 million, but prices showed little reaction. Market sentiment was instead weighed down by the cancellation of a planned phone call between the U.S. and China, originally announced by the White House. Reports indicated President Trump faced rejections from China, Iran, and Russia within 48 hours. However, a phone call with Russian President Vladimir Putin brought a degree of diplomatic progress, particularly on the Iranian issue, even though there was no movement on the Ukraine conflict issues. Iran's Foreign Ministrer Abbas Araghchi later confirmed that nuclear negotiations remained possible, hinting at ongoing diplomatic maneuvering.

Investor activity also points to a cautious outlook. While $41.3 million in United States Oil Fund (USO) shares were bought—partially closing earlier short positions around $67.00–69.00—there was also $75.8 million in selling this week, suggesting continued expectations for a pullback toward the $57.00–59.00 support zone. Participating in such a decline may be risky, and a pullback could offer better entry points for a rebound.

While key U.S. macroeconomic data, including Nonfarm Payrolls, is due this week, broader geopolitical and supply-demand narratives appear to remain the primary forces guiding the oil market’s direction.