Oil prices experienced a slight increase despite adjustments in demand estimates by OPEC. ICE Brent prices settled just below $65 per barrel as the market evaluates policy developments on tariffs and their implications for oil demand.
Chinese trade data indicated strong performance in terms of oil imports in March, with crude oil imports averaging 12.2 million barrels per day, marking a 4.8% yearly increase and almost a 9% monthly rise. However, cumulative imports have decreased by 1.5% year on year. March saw a significant monthly rise in refined product exports by nearly 40% to 5.24 million tonnes, although the year-to-date exports are down 15.9% year on year.
Opec Demand Growth Revision
OPEC’s recent monthly report witnessed a reduction in demand growth estimates for 2025 by 150,000 barrels per day to 1.3 million barrels per day, with a similar outlook for 2026. Despite demand growth reductions, OPEC’s estimates remain more positive compared to other agencies. The International Energy Agency had forecasted oil demand growth at just over 1 million barrels per day for the current year.
Risks and uncertainties accompany forward-looking statements, suggesting careful consideration and thorough research before making investment decisions. The market complexities imply that investment carries inherent risks, including potential total loss.
While Brent prices hovered just shy of the $65-per-barrel mark, the market’s resilience seems to stem more from forward expectations than immediate fundamentals. Tariff-related uncertainties—and the prospect of further economic barriers impacting global trade—continue to act as a tug on sentiment. The subdued price reaction in the face of reduced demand growth illustrates that investors are weighing policy risks alongside traditional supply-demand metrics.
China’s crude buying in March was surprisingly robust. Daily import volumes rising almost 9% from the previous month show an assertive refilling of storage tanks or an effort to frontload purchases amid shifting global conditions. Still, when zooming out, the broader year-on-year decrease of 1.5% cannot be ignored. It’s partly a sign of earlier inventory saturation or reduced downstream activity earlier in the year. The sharp monthly jump in refined fuels shipped abroad—up nearly 40%—might seem promising, but the full-quarter trend (nearly 16% down) tells another story, placing pressure on refining margins and suggesting that profit-taking in exports has been inconsistent.
Opec Vs Iea Divergence
In its latest update, OPEC conceded to a more modest view of 2025 oil consumption by trimming its growth estimates by around 150,000 barrels per day. While this brings the figure to 1.3 million bpd, it still outpaces that from the IEA, which is barely above the 1 million mark for this year. That divergence matters—it creates pricing tension between those trading on optimism fuelled by producers’ assumptions and those leaning towards more cautious neutral scenarios.
What this means in the weeks ahead is that we’re navigating a complex pricing environment, where near-term support might be artificially propped up by production restraint or speculative positioning. Volatility could flare if economic data from Asia softens or if upcoming macroeconomic policy shifts in the West realign expectations.
From a tactical point of view, near-month contracts might seem underwhelming, yet there’s evidence of building interest further out along the curve. That, of course, comes with its own sensitivities—especially if inventories in key regions begin climbing amidst stable or falling consumption.
Now is not the moment for broad directional bias. Instead, we’d look for inflection points in refinery run-rates, especially in Asia, as well as any changes in US product inventories. Clear signals could emerge from shifts in trading behaviour around expiry cycles, particularly if open interest and volume skew to the downside.
The gap between physical and futures market sentiment continues to widen. That dissonance won’t last forever. Those engaging in speculative activity or role-based hedging should be watching closely for when reversion begins—likely coinciding with updated macro forecasts heading into early summer.
