Oil prices were volatile as markets weighed on emerging risks
Oil prices were volatile as markets weighed a combination of supportive macroeconomic data and emerging downside risks. Sentiment found some near-term support from stronger-than-expected economic indicators out of China, with GDP growth and industrial production both surprising to the upside. These figures reinforced the view that activity in the world’s largest crude importer is stabilising, offering a constructive signal for demand expectations.
However, renewed transatlantic tensions, linked to the escalating dispute over Greenland, have taken on greater significance following President Trump’s latest tariff threats against several European countries. The prospect of a wider US-Europe trade confrontation has injected caution into the outlook, given the potential drag on global growth and, by extension, oil demand. At the same time, receding geopolitical risks in the oil-rich Middle East leave the market exposed to to the downside as attention turns away from the region. Additionally, concerns around oversupply are likely to continue weighing on the medium- to long-term balance of risks for crude.
