WTI crude oil futures (OIL.WTI) are heading for a positive weekly close, rising 1.5% on Friday, as investors hope for favorable outcomes from U.S.–China talks, while a trade agreement with the U.K. has given markets renewed optimism that the new U.S. trade policy may not lead to a major economic slowdown.
- The main driver of oil prices currently is optimism surrounding a potential mutual easing of tariffs between Washington and Beijing. Yesterday, the New York Post reported that U.S. tariffs on China could be reduced next week from 145% to as low as 50%. U.S. Treasury Secretary Scott Bessent is scheduled to meet with Chinese Vice Premier He Liefeng in Switzerland on May 10. Analysts at Vanda Insights suggest that a positive outcome could push prices up by another $2 to $3.
- Data from China shows an acceleration in exports and a slightly smaller decline in imports in April. Although crude oil imports declined month-over-month, they rose 7.5% year-over-year, driven by stockpiling at domestic refineries. The main pressure on the oil market remains the prospect of higher production from OPEC. However, Reuters data suggests that OPEC's oil output actually declined in April, due to drops in Libya, Venezuela, and Iraq.
OIL.WTI (Daily Chart)
Oil prices are extending their rebound. The chart shows a renewed upward reaction around the $55 per barrel area, and since then, prices have bounced over 10%. The improving technical picture points to a potential test of the 50-day EMA, currently near $65. However, lack of progress in Sina - US talks may pressure oil prices again.
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Source: xStation5
