WTI moves below $61.50, downside seems limited due to easing of US-China trade tensions

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

  • WTI price may recover amid renewed optimism driven by progress in US-China trade talks.

  • The two nations have reached a preliminary agreement in Switzerland to substantially reduce tariffs, indicating a de-escalation in trade tensions.

  • Oil prices may struggle due to concerns over a possible supply glut, especially with the prospect of increased OPEC+ output.


West Texas Intermediate (WTI) Oil price paused its three-day winning streak, trading around $61.40 per barrel during Asian hours on Tuesday. Despite this pullback, Oil prices remain underpinned by optimism following progress in the United States (US)-China trade negotiations.


Over the weekend, the United States and China reached a preliminary deal in Switzerland to significantly reduce tariffs, signaling a possible easing of trade tensions. Under the agreement, the US will lower tariffs on Chinese goods from 145% to 30%, while China will cut its tariffs on US imports from 125% to 10%. The breakthrough has been widely welcomed by markets as a key step toward de-escalation.


However, downside risks to Oil prices persist. Concerns about oversupply continue to weigh on the Oil market, particularly with OPEC+ signaling a potential increase in output for May and June. Adding to the pressure, President Donald Trump indicated progress in nuclear talks with Iran, fueling speculation that US sanctions on Iranian oil exports could be eased.


Geopolitical developments are also in focus. Ukrainian President Volodymyr Zelensky has invited President Trump to participate in potential peace talks in Turkey this week, as Kyiv intensifies efforts to secure a cease-fire in the ongoing conflict with Russia.


On the regulatory front, the US Department of Energy announced plans on Monday to eliminate or revise more than 40 regulations and programs as part of President Trump’s push to roll back federal oversight and diversity initiatives. The department claims the move could save taxpayers $11 billion and marks the first phase of its most extensive deregulation drive to date.


Looking ahead, market participants are awaiting the release of the US Consumer Price Index (CPI) report for April, scheduled later on Tuesday. Analysts expect headline inflation to rebound to 0.3% month-over-month from a previous -0.1%, while core CPI is also projected to rise to 0.3% from 0.1%. Year-over-year figures for both are forecast to remain unchanged.


* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
WTI extends upside above $72.00 as Israel-Iran conflict deepensWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.15 during the Asian trading hours on Monday.
Author  FXStreet
16 hours ago
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.15 during the Asian trading hours on Monday.
placeholder
Israeli Airstrikes on Iran Escalate Middle East Conflict, Spiking Oil Prices and Lifting Oil StocksAs of June 13, Brent crude oil has surged over 5%, trading at approximately $72.9 per barrel, after intraday highs of $78.50—a peak not seen since January 27.
Author  TradingKey
Jun 13, Fri
As of June 13, Brent crude oil has surged over 5%, trading at approximately $72.9 per barrel, after intraday highs of $78.50—a peak not seen since January 27.
placeholder
WTI climbs above $72.00 on heightened geopolitical tensions in the Middle EastWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.05 during the Asian trading hours on Friday.
Author  FXStreet
Jun 13, Fri
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.05 during the Asian trading hours on Friday.
placeholder
Stocks, crypto, and dollar crash rapidly while oil prices surge as Iran and Israel kick off their warMarkets across the board fell hard late Thursday after Israel launched airstrikes on Iran, kicking off what could become a larger regional conflict.
Author  Cryptopolitan
Jun 13, Fri
Markets across the board fell hard late Thursday after Israel launched airstrikes on Iran, kicking off what could become a larger regional conflict.
placeholder
Gold and oil surge after US personnel leave the Middle EastOil prices climbed on Thursday after Trump ordered the relocation of American personnel from the Middle East. Gold climbed by 0.6% to about $3,373 an ounce.
Author  Cryptopolitan
Jun 12, Thu
Oil prices climbed on Thursday after Trump ordered the relocation of American personnel from the Middle East. Gold climbed by 0.6% to about $3,373 an ounce.
Real-time Quote