[ad_1]
At 09:57 GMT, Light Crude Oil Futures are trading $63.51, up $1.10 or +1.76%.
Short-Covering Drives Gains, But Macro Risk Caps Rally
Tuesday’s rally was largely driven by short-covering after both WTI and Brent dropped more than 2% on Monday. That selloff was fueled by signs of progress in U.S.-Iran nuclear talks, which eased supply fears.
Hiroyuki Kikukawa of Nissan Securities said bargain-buying emerged, but noted that economic uncertainty stemming from U.S. tariffs continues to weigh on sentiment. Kikukawa expects WTI to remain rangebound between $55 and $65 due to persistent trade and policy-related concerns.
Fed Tensions and Recession Risks Press on Demand Outlook
Investor caution intensified after U.S. President Donald Trump again criticized Federal Reserve Chair Jerome Powell, urging immediate rate cuts. The remarks raised questions about Fed independence and rattled broader markets, with major U.S. equity indexes sliding and the dollar index hitting a three-year low.
Traders are growing increasingly wary that monetary policy instability could drag down U.S. growth—and by extension, crude oil demand. A Reuters poll put the probability of a U.S. recession within the next year at nearly 50%.
Iran Sanctions Relief Could Weigh on Supply Premium
Geopolitical headlines also pressured oil’s risk premium. The U.S. and Iran agreed over the weekend to start drafting a potential nuclear agreement, a move that could lead to eased sanctions and boost Iranian oil exports. Commonwealth Bank’s Vivek Dhar noted that risks to Iranian supply have diminished, which could further soften bullish pressure on crude markets.
[ad_2]
