Crude Prices Creep Up as New Pipelines Come Online and Policy Changes Loom

Prices are starting to creep back up after a sharp sell-off to start the week and mirror a broader recovery in equity markets. This morning, Brent crude gained $0.58 to reach $66.84 per barrel, while the U.S. WTI May contract rose $0.92 to $64. The more actively traded WTI June contract also saw an increase of $0.86, hitting $63.27.

Markets remain caught between lingering concerns surrounding U.S. monetary policy and ongoing trade tensions. President Trump’s renewed criticism of Federal Reserve Chair Jerome Powell and continued calls for interest rate cuts have fueled debate over the direction of economic policy. These pressures, along with evolving geopolitical developments, continue to create volatility across both oil and equity markets.

Oil prices often move in tandem with equity markets, as both are driven by broader investor sentiment and expectations for economic growth. Monday’s price decline was triggered by stock market weakness and easing supply concerns tied to progress in U.S.-Iran nuclear talks, which could lead to more Iranian oil returning to global markets. Still, underlying demand fundamentals remain solid, with anticipated draws in U.S. crude and gasoline inventories adding to the bullish sentiment. Adding to the complex economic backdrop, the International Monetary Fund (IMF) has raised its forecast for the likelihood of a U.S. recession in 2025 to 40%, up from 27% in October. The adjustment reflects growing concerns about how potential tariffs and ongoing trade tensions could weigh on the U.S. economy. While the IMF still expects the U.S. to avoid a recession, it now places the odds of one occurring this year at 37%, according to U.S. News & World Report.

Further shaping the current market outlook, U.S. infrastructure development continued in 2024 with the completion of five petroleum liquids pipeline projects, according to the latest update from the Liquids Pipeline Projects Database. These included two key petroleum product pipelines aimed at improving refined product flows:

• Texas Western Products System (Enterprise Products): A 60,000 bpd pipeline was converted and reversed to move gasoline and diesel from the Texas Gulf Coast to the Mid-continent and Rocky Mountain regions.
• Houston to El Paso Pipeline (ONEOK): A 30,000 bpd expansion along an existing route raised total system capacity to 1 Mbpd, enhancing refined product deliveries to West Texas.

In total, the U.S. Liquids Pipeline Projects Database tracks over 270 projects—including crude oil, hydrocarbon gas liquids (HGLs), and petroleum product pipelines—dating back to 2010. The database includes active, completed, proposed, and canceled projects and is updated twice annually based on data from company filings, government records, and media sources.

Meanwhile, the federal regulatory environment is undergoing rapid change. The Trump administration has issued a series of executive orders aimed at reducing perceived regulatory burdens on domestic energy production. These directives include plans to sunset all existing federal energy regulations by next year, provisions that allow repeals without public comment, and streamlined exemptions from clean air requirements.

Agencies have already begun implementing these changes—expediting project permits, waiving environmental reviews, and simplifying exemption processes. While these moves could reduce compliance hurdles for energy companies and speed up development timelines, they have also sparked concern among legal experts and environmental organizations.

Several environmental groups are preparing for what they expect will be a wave of legal challenges. Their focus will be on ensuring that agencies continue to follow the procedures required by the Administrative Procedure Act, which mandates public notice and input for federal rule changes. Some of the legal grounds being used—such as presidential exemptions under the Clean Air Act—are largely untested in court, adding uncertainty to how long these changes may hold.