Oil prices rose slightly on Friday, recovering some ground after a sharp drop in the previous session, as optimism surrounding U.S.-China trade relations offset concerns about a potential increase in Iranian oil supply.
As of early Friday trading, Brent crude futures were up by 17 cents, or 0.26%, reaching $64.70 per barrel. Meanwhile, U.S. At $61.80 a barrel, West Texas Intermediate (WTI) crude increased 18 cents, or 0.29%.
The gains put oil on track for a weekly rise of more than 1%, despite Thursday’s decline of over 2%. U.S. President Donald Trump suggested Tehran had tentatively accepted the plan, implying that Washington was getting close to a nuclear accord with Iran. However, sources close to the negotiations noted that key issues remained unresolved.
Earlier in the week, oil markets saw a boost from renewed trade optimism after the U.S. and China—two of the world’s largest oil consumers—agreed to a 90-day pause in their trade dispute. The temporary truce, which includes a rollback in tariffs, helped ease investor fears about global economic slowdown and its impact on energy demand.
Still, oil market sentiment remains fragile, influenced by concerns over potential increases in supply, particularly from Iran if sanctions are lifted. Analysts also point to rising output from OPEC+ countries, which could further weigh on prices.
In a client note, ANZ Bank highlighted that easing geopolitical tensions had tempered bullish momentum, while worries about rising output among oil-producing nations added to market caution.
The International Energy Agency (IEA) added to supply-side concerns on Thursday, projecting that global oil production could increase by 1.6 million barrels per day this year—an upward revision of 380,000 barrels per day from its previous forecast. The adjustment comes as major producers, including Saudi Arabia and other OPEC+ members, scale back earlier output cuts.
With both demand-side optimism and supply-side risks in play, traders remain cautious as the global oil market continues to navigate a complex mix of economic and geopolitical factors.