On Tuesday (April 22), international oil prices rose slightly, mainly driven by investors' short covering. Brent crude oil futures rose by 1.36% at one point, reaching a high of $67.36 per barrel; The May WTI crude oil contract in the United States rose to a maximum of $64.05 per barrel, an increase of 1.54%, while the more actively traded June contract rose by 1.84%, reaching a maximum of $63.56 per barrel. However, this rebound did not change the overall cautious sentiment in the market. On Monday, both benchmark crude oils fell more than 2%, mainly due to progress in US Iran negotiations, easing supply concerns.

Two major hidden concerns suppress the upward potential of oil prices

1. The trade war is shrouded in clouds, and the demand outlook is bleak

Hiroyuki Kikukawa, Chief Strategist at Nissan Securities, pointed out that "despite short covering driving short-term rebounds, the market is still concerned that the trade war may lead to an economic recession." He expects WTI crude oil to remain volatile in the $55-65 range amid ongoing uncertainty.

According to a Reuters survey on April 17th, investors believe that trade policies will significantly drag down the US economy, with a nearly 50% probability of recession in the next 12 months, further suppressing expectations for crude oil demand.

2. The independence of the Federal Reserve is challenged, and market confidence is shaken

US President Trump once again criticized Federal Reserve Chairman Powell on Monday, demanding an immediate interest rate cut, otherwise the US economy may slow down. This move has intensified market concerns about the independence of the Federal Reserve's policies and may affect global capital flows, thereby impacting the crude oil market.

Kikukawa warns, "The uncertainty of US monetary policy may disrupt financial markets, even drag down economic growth, and ultimately weaken oil demand

3. Progress in US Iran negotiations, easing supply side pressure

Last Saturday (April 19th), the United States and Iran agreed to draft a potential nuclear agreement framework, raising expectations in the market for Iranian oil to return to the international market. Vivek Dhar, an analyst at the Commonwealth Bank of Australia (CBA), said, "The US Iran negotiations have reduced the urgent risk of Iran's oil exports facing sanctions, and the supply side pressure has eased to some extent

In addition, the Russian Ministry of Economy has lowered its forecast for the average price of Brent crude oil in 2025 by nearly 17%, further reflecting the market's cautious attitude towards long-term demand.

Outlook for the future: Inventory data becomes a short-term focus

Despite the short-term rebound in oil prices, factors such as the trade war, Federal Reserve policies, and US Iran negotiations will continue to pressure the market. Under multiple uncertainties, oil prices may remain volatile in the short term, and investors need to be alert to the impact of sudden risk events.

Short term focus:

US inventory data: A preliminary Reuters survey shows that US crude oil and gasoline inventories may have decreased last week, but distillate inventories may have increased, which could affect short-term trends.

Federal Reserve Trend: If the White House continues to pressure interest rate cuts, it may exacerbate market volatility.

Progress in trade negotiations: Any new developments could trigger severe fluctuations in oil prices.