Oil prices held their ground on Friday, inching toward a second straight weekly gain as easing U.S.-China trade tensions injected optimism into energy markets. Brent crude traded at $64.52 per barrel, nearly flat, while WTI inched up to $61.64. Despite a sharp selloff on Thursday triggered by renewed hopes of an Iranian nuclear agreement, the broader picture for crude remains bullish. Both benchmarks had already logged over 1% weekly gains, supported by a temporary pause in U.S.-China tariffs and signs of improving global demand resilience.
The potential reintroduction of Iranian supply has, however, kept gains in check. President Donald Trump hinted that Tehran had “sort of” agreed to nuclear deal terms, but insiders familiar with negotiations noted unresolved sticking points. Still, the possibility of an agreement stirred concern over supply pressures in an already cautious market. Yet traders are weighing these risks against the larger backdrop of a 90-day pause in trade hostilities between the world’s two largest economies—a development that has supported sentiment across risk assets.
Equity markets have been riding a wave of bullish momentum, with the S&P 500 up nearly 10% in just a month. Volatility has also cooled, with the VIX retreating from 30 to 18. According to the Sevens Report, three major shifts have underpinned this rally: tariff clarity, the prospect of lower inflation opening the door for rate cuts, and a more favorable valuation picture for 2026. While skepticism remains over the rally’s sustainability, current drivers appear well-supported.
In other developments, gold found support from geopolitical instability and fresh signs of economic softening in the U.S. Data showed a surprising 0.5% drop in April’s Producer Price Index—its first monthly decline in nearly two years—echoing a broader trend of easing inflation. Combined with modest retail sales growth and weakening Treasury yields, markets are increasingly betting on additional rate cuts by the Federal Reserve. This dovish tilt weighed on the dollar and lifted gold prices off recent lows.
Geopolitical tensions remain a wildcard. Israeli strikes in Gaza, the stalled Russia-Ukraine talks in Istanbul, and mixed signals from global leaders all add layers of uncertainty. But in the short term, the interplay between trade de-escalation, dovish Fed expectations, and inflation data is setting the tone for global markets.
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