Crude oil prices held steady on Tuesday as market participants weighed rising global supply levels against cautious optimism surrounding the temporary pause in the U.S.-China trade conflict.
Brent crude oil, the international benchmark for Nigerian oil, rose by 9 cents or 0.14% to $65.05 per barrel by 09:03 a.m. in Nigeria while U.S. West Texas Intermediate (WTI) crude gained 11 cents, or 0.2%, to trade at $62.06.
The marginal gains followed a more than 4% rally in the previous session, driven by news of a temporary de-escalation in trade tensions between the world’s two largest economies.
The 90-day tariff truce between Washington and Beijing while offering short-term relief, has not yet translated into a long-term resolution, prompting analysts to adopt a cautious outlook.
Tamas Varga, an oil analyst at PVM, said, “The market is now evaluating the impact of the trade truce. Coupled with the scheduled steep increase in OPEC+ supply in May and June, the upside might prove limited.”
The Organization of the Petroleum Exporting Countries (OPEC), alongside its allies, has reportedly increased oil output beyond earlier estimates since April.
Preliminary data indicates that May production is set to rise by approximately 411,000 barrels per day, adding further pressure to the global supply-demand balance.
Despite this, there are positive signals on the demand side, particularly in refined fuel markets.
In a market note, analysts at JPMorgan noted that although international crude prices have declined by 22% since peaking on January 15, refined product prices and refining margins have remained relatively stable.
“Reduced refining capacity, especially in the U.S. and Europe, has tightened gasoline and diesel balances, increasing dependence on imports and exposing the market to price volatility during maintenance cycles and unplanned outages,” JPMorgan stated.
These dynamics have kept support levels intact for refined fuels even as crude prices struggle to regain earlier highs. The tight refining environment may cushion potential downside pressure on oil prices in the short term.
Analysts also warned that crude demand remains vulnerable to macroeconomic headwinds, particularly if the trade negotiations between the U.S. and China fail to yield a sustainable agreement beyond the 90-day window.
As the market navigates through conflicting signals from supply expansions, trade policy developments and downstream resilience, investors are expected to remain cautious.
The short-term stability in oil prices suggests traders are adopting a wait-and-see approach until more definitive policy and production outcomes materialise.
Global oil markets are likely to remain sensitive to updates from OPEC+ producers and further signals from ongoing U.S.-China trade discussions.
