Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
March 13, 2025 –
“Oil Recovery: Sustainable or Just a Temporary Relief?
The price of oil has managed a slight recovery after hitting multi-year lows, although significant risks remain that could limit the sustainability of this improvement. In recent sessions, WTI crude has risen more than 2%, once again surpassing $67 per barrel, driven primarily by positive demand indicators in the United States and signs of a potentially less aggressive monetary policy from the Federal Reserve.
The recent slowdown in U.S. inflation, evidenced by the lowest CPI growth rate in four months, has fueled market expectations of a more accommodative Fed in future monetary decisions. This stance could provide temporary relief for oil, as it reduces fears of an aggressive monetary policy that could hinder economic activity.
However, downside risks remain relevant. In particular, geopolitical factors create additional uncertainty. Ceasefire negotiations between Ukraine and Russia could, paradoxically, prove negative for crude prices. A potential de-escalation of tensions could lead to greater stability in Russian supply, exacerbating the risk of global oversupply, especially in a scenario where OPEC+ is already increasing production, with countries like Kazakhstan exceeding established quotas.
On the other hand, recent data from the U.S. Energy Information Administration (EIA) has shown mixed signals. While crude inventories increased by 1.4 million barrels—well below market expectations—they remain 5% below the five-year average, indicating that, for now, supply is not excessive. Nevertheless, the significant reduction in refined product inventories, particularly gasoline and distillates, may partially offset downward pressure on crude.
The sharp decline in gasoline reserves, which fell by nearly 6 million barrels to levels not seen since January, reflects strong domestic demand in the U.S., another factor temporarily supporting prices.
In contrast, the sustained decline in U.S. oil imports, currently at 5.5 million barrels per day, poses a significant challenge for oil-exporting economies, particularly Mexico and Colombia. Lower oil revenues could weaken their public finances.
Additionally, uncertainty surrounding U.S. trade tariffs, coupled with uncertain demand in China—the world’s largest crude importer—continues to exert pressure on the energy market. These factors, combined with Canada’s recent decision to impose tariffs exceeding $20 billion on U.S. products, add volatility to the international oil landscape.
Although the EIA has recently lowered its global surplus forecasts for 2025, the combination of economic, geopolitical, and trade factors continues to create a highly uncertain environment.In summary, while the current rebound provides some relief, markets should brace for more turbulence in the coming months.”
Analysis by Quasar Elizundia, Expert Research Strategist – Pepperstone