US-China Tariff Pause Fuels Crude Rally
The rally gained momentum after both countries announced a 90-day suspension of 24% ad valorem tariffs on each other’s goods, a move that has lifted expectations for renewed trade flows and stronger demand from the world’s top two oil consumers. The agreement, reached during trade talks in Geneva over the weekend, sent crude prices climbing more than $2 in Asian trading.
Market sentiment was already on firmer ground after WTI and Brent each posted over 4% weekly gains, breaking a six-week losing streak. Friday’s price action was boosted by a separate U.S.-UK trade agreement, which added to hopes that recent tariff-driven economic disruptions might ease.
OPEC Output Uncertainty Tempers Upside
While the broader demand outlook has improved, gains were partially limited by supply-side developments. Analysts flagged the potential impact of OPEC+ production increases scheduled for May and June, which could add incremental barrels to a market still finding balance. However, a Reuters survey found that OPEC’s output actually slipped in April, providing a modest bullish counterbalance.
Iran Nuclear Talks and US Rig Count in Focus
Geopolitical risks remain a wildcard. Talks between the U.S. and Iran over Tehran’s nuclear program ended on Sunday without resolution, though further discussions are planned. Any progress could lead to a deal that increases Iranian crude exports, weighing on prices. In the U.S., the oil rig count continued to decline, falling to its lowest since January according to Baker Hughes, signaling potential softness in domestic production ahead.
Crude Oil News Today Points to a Bullish Setup
The combination of improved demand sentiment from U.S.-China tariff relief and continued signs of tightening U.S. supply sets a bullish near-term tone for crude. Traders will watch closely how WTI handles the $64.00 technical barrier. A strong break above could ignite another leg higher toward $67.66, especially if OPEC+ output gains remain muted and geopolitical risks persist.
More Information in our Economic Calendar.
