Oil prices edged higher Thursday after a sharp 2% drop the previous day, as investors weighed growing discord within OPEC+ against shifting signals from U.S.–China trade talks and ongoing U.S.–Iran negotiations.
Brent crude rose to around $66.44 a barrel, while West Texas Intermediate climbed to $62.65. The rebound followed reports that some OPEC+ members are pushing for a larger output hike in June, deepening concerns about compliance issues and potential internal rifts. Kazakhstan, a frequent overproducer, has stated it will prioritize national interests over OPEC+ commitments, raising fears of further instability within the alliance.
Analysts warned that such disagreements could lead to a breakdown in coordination or even a price war. OPEC+ is set to meet on May 5 to discuss production plans for June.
At the same time, global trade dynamics added to market volatility. While the U.S. signaled it may be open to easing tariffs on Chinese goods to facilitate talks, mixed messages from the White House left uncertainty hanging over the negotiations. Treasury Secretary Scott Bessent called current tariff levels unsustainable, but other officials ruled out unilateral concessions.
Extended trade tensions could weigh on energy demand, with analysts at Rystad Energy warning that a prolonged U.S.–China standoff might cut China's oil demand growth in half this year.
Meanwhile, the U.S. and Iran are preparing for a third round of talks on potentially reviving a nuclear deal, which could lead to the return of Iranian oil to global markets. However, fresh U.S. sanctions on Iran's energy sector have cast doubt on the prospects for swift progress.