Oil News: Trade Talk Hopes and Iraq Cut Boost Crude Oil Futures Ahead of EIA Data

Crude Oil Steady as Market Eyes EIA Data and Trade Developments

Light crude oil futures held firm on Wednesday as traders awaited the latest U.S. Energy Information Administration (EIA) inventory report. Prices hovered near key technical levels, with resistance at $63.34 and support around $59.23. A breakout above the resistance could target the 50-day moving average at $67.76, while a breach of support may prompt a retest of last week’s $55.12 low.

At 13:53 GMT, Light Crude Oil Futures are trading $62.16, up $0.83 or +1.35%.

Oil Prices Forecast Improves on Trade Talks and Iraq’s Supply Cut

Oil futures rose roughly 1% following reports that China may be open to U.S. trade talks—if certain conditions are met—including more respect from Washington and a change in the U.S. negotiation team. Analysts view a potential thaw in U.S.-China relations as bullish for crude, reducing the downside risks to global oil demand.

In a further boost to sentiment, Iraq plans to cut its April production by 70,000 barrels per day to comply with OPEC+ quotas. This comes as the group faces mounting pressure to support prices, which have fallen 13% this month on concerns over slowing demand and rising supply.

IEA, OPEC Lower Demand Growth Outlook as Tariff Tensions Drag

Despite recent gains, the broader outlook remains under pressure. The International Energy Agency (IEA) slashed its 2025 global oil demand growth forecast to 730,000 barrels per day—the lowest since 2020—citing economic headwinds and escalating U.S.-China tariffs. About half of the downgrade stems from weaker demand projections in the U.S. and China.

OPEC also revised its demand forecast lower by 150,000 barrels per day for both this year and next, although its projections remain more optimistic than the IEA’s. Both agencies flagged rising non-OPEC+ supply, which could widen the surplus later this year.

Indonesia’s U.S. Energy Import Plan Adds Fresh Support

Adding a new wrinkle, Indonesia signaled it may increase U.S. crude and LPG imports by $10 billion to avoid steep tariffs from Washington. The move could shift regional trade flows and support U.S. export demand, particularly as Jakarta considers cutting LPG purchases from other major suppliers like Qatar and the UAE.

Bearish Market Tone Despite Short-Term Support

While Wednesday’s price action shows some resilience, the broader trend remains bearish. Trade war escalation, slowing global demand, and increased supply from OPEC+ and non-OPEC producers continue to weigh heavily. Without a sustained diplomatic breakthrough or a surprise supply disruption, the path of least resistance for oil remains to the downside.

More Information in our Economic Calendar.