Oil prices surge 4% on China-US trade truce, but downside risks predicted by analysts

From Yahoo Finance: 2025-05-12 12:11:00

Oil prices surged 4% on news of a US-China trade truce, with WTI futures near $62.50 and Brent crude above $65. The rally was fueled by short position covering after the tariff pause. Saudi Aramco reported profit plunge, sparking speculation of OPEC production cuts. US shale production may decline due to current prices.

Goldman Sachs predicts downside risks if OPEC+ increases output, potentially lowering Brent to $60 and WTI to $56 by year-end. Analysts warned of solid supply growth outside US shale, weighing on prices. Diamondback cautioned that domestic production has likely peaked, pointing to a decrease in the coming quarters.

Read more: Oil jumps 4% as traders signal ‘risk back on’ after China-US trade truce