Key Points
- WTI crude rose 0.4% to $59.71, while Brent gained 0.4% to $63.54.
- Optimism over US-China dialogue supported prices, though broader uncertainty capped gains.
Oil prices climbed on Tuesday as early signs of progress in US-China trade relations improved market sentiment and eased worries about global fuel demand.
US Treasury Secretary Scott Bessent said that President Donald Trump remained committed to meeting Chinese President Xi Jinping in South Korea later this month. Both sides held substantial communications over the weekend, with additional meetings planned in the coming days.
Trade Thaw Supports Oil
Brent crude futures rose 22 cents, or 0.4%, to $63.54 per barrel by 0405 GMT, while West Texas Intermediate (WTI) gained 22 cents, or 0.4%, to $59.71 per barrel. In the previous session, Brent had settled 0.9% higher, while WTI gained 1%.
The prospect of improved trade ties between the two largest economies has historically lifted oil prices, as traders anticipate stronger global growth and higher energy consumption.
Global Backdrop Remains Mixed
Despite the tentative optimism, traders remain cautious. Recent developments, such as Beijing’s expanded export controls on rare earth minerals and Trump’s threats of 100% tariffs and software export restrictions, have kept market volatility elevated.
The oil market also remains sensitive to new global flashpoints. Trump on Monday declared the end of the two-year Gaza conflict, which had weighed on Middle Eastern supply dynamics.
Meanwhile, China’s decision to impose levies on US-owned ships, including oil tankers, prompted last-minute cancellations and a spike in freight rates, according to ANZ analyst Daniel Hynes.
OPEC+ Outlook
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, stated in their latest monthly report that the supply shortfall is expected to narrow in 2026 as the OPEC+ coalition proceeds with planned production increases.
This suggests that while near-term supply constraints remain supportive, longer-term output expansion could temper price gains.
Technical Analysis
Crude oil (CL-OIL) is currently trading around $59.51, down marginally by 0.04%, as prices consolidate near five-month lows amid concerns over slowing global demand and persistent supply resilience from major producers.
Despite OPEC+ production discipline, rising output from non-OPEC countries such as the U.S. and Brazil has capped any bullish momentum, while weaker-than-expected Chinese factory and trade data have reignited fears of a broader economic slowdown.
From a technical perspective, oil remains in a downtrend, struggling to recover above key moving averages. The price is trading below the 5-, 10-, and 30-day MAs, signalling strong bearish control.
The breakdown below the $60.00 psychological level and the $62.00 short-term resistance confirms a sustained downside bias. The next major support lies near $55.00, the year-to-date low marked earlier in April, while a close back above $63.00 would be needed to signal any meaningful rebound.
The MACD continues to reflect bearish momentum, with the signal line trending above the MACD line and a deepening red histogram, suggesting continued selling pressure. Unless a strong catalyst emerges, short-term rallies are likely to be capped.
Fundamentally, investors are watching for fresh cues from the U.S. inventory data later this week, which could provide clarity on near-term demand trends. Meanwhile, the stronger U.S. dollar is adding an additional headwind for commodity-linked assets.
Outlook
Oil’s short-term direction will depend on progress in US-China trade discussions and the broader demand outlook. While easing rhetoric between Washington and Beijing has offered some relief, the market remains vulnerable to renewed tensions or disappointing data on global consumption trends.
