WTI drifts higher above $64.50 on US-China trade talk hopes

• WTI price edges higher to around $64.65 in Tuesday’s Asian session.

• Hopes sparked by US-China trade talks and geopolitical risks support the WTI price. 

• OPEC and its partners have agreed to expand short-term oil production.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.65 during the Asian trading hours on Tuesday. The WTI price climbs to nearly seven-week highs, bolstered by a potential trade deal and a weaker US Dollar (USD). Investors await news from US-China trade talks in London for fresh impetus. 

Investors are optimistic about the negotiations between the US and China, even though no significant breakthroughs were announced after the first day of talks. US President Donald Trump said that the talks “should go very well.” Oil traders are hopeful of a positive outcome from negotiation, which might support the global economic outlook and boost oil demand. This, in turn, could underpin the WTI price. 

Furthermore, persistent geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war could lift demand for crude oil. Early Tuesday, Kyiv and Odesa came under another mass Russian attack, involving ballistic missiles and drones. Explosions were heard across the capital as air defense systems engaged the targets.

On the other hand, the latest move by the Organization of the Petroleum Exporting Countries (OPEC) might cap the upside for the WTI. OPEC and its partners have agreed to expand short-term oil production, with a planned boost of 411,000 barrels per day in July now set to weigh on global prices.