- Oil prices rose on May 7 as the US and China resumed trade talks; Brent hit $62.98, up 1.76%.
- EIA cut its 2025 oil forecast, citing rising inventories and increased OPEC+ output.
- Global crude stocks grew by 300,000 bpd in early 2025, reversing earlier drawdown projections.
Oil prices climbed on Wednesday, May 7, as traders reacted to renewed US-China trade talks and expected a drop in US crude inventories. However, a lower 2025 oil price forecast from the US Energy Information Administration (EIA) capped gains.
Brent crude, the global benchmark, rose 1.76% to $62.98 per barrel at 10:52 a.m. local time (0752 GMT), up from $61.89 in the previous session. Meanwhile, US benchmark West Texas Intermediate (WTI) dipped 0.22% to $58.84 per barrel, compared to Tuesday’s close of $58.71.
Traders responded to reports that senior US and Chinese officials will meet this week in Switzerland. The talks mark the first formal engagement since former President Donald Trump launched sweeping tariffs on Chinese imports.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will lead the American delegation. Bessent will meet China’s top economic envoy on May 8, and Greer will engage his counterpart in trade-focused discussions.
“Economic security is national security,” Bessent said in a statement. “President Donald J. Trump leads efforts to build a stronger, more prosperous America.”
Markets welcomed the talks, hoping they would ease trade tensions and lift global oil demand. But oversupply concerns continue to weigh on sentiment.
The EIA slashed its 2025 oil price outlook in its latest Short-Term Energy Outlook released Tuesday. The agency now projects Brent crude will average $65.85 per barrel this year, down from $67.87 in April. That marks an $8 drop from the $73.85 forecast it issued in January.
The EIA also lowered its WTI crude forecast from $63.88 to $61.81 per barrel.
Rising global inventories and increased OPEC+ production prompted the EIA to revise its projections. The agency reported that global oil stocks grew by 300,000 barrels per day (bpd) in the first four months of 2025. In January, the agency had predicted a drawdown of 200,000 bpd over the same period.
OPEC+ producers raised output last month, further adding to the supply glut. Analysts believe these increases will keep prices under pressure in the coming months.
Despite the current price bounce, many market observers expect limited upside unless the trade talks produce a breakthrough or global supply tightens.
Investors will watch inventory data and trade outcomes closely for signals on market direction.