WTI crude oil rallies on increased risk sentiment

WTI rallies after US stockpiles fall for the second straight week, signalling tighter supply. US–China trade talks resume this weekend, boosting the demand outlook amid global risk appetite. WTI approaches the key psychological $60.00 resistance zone, with the 20-day SMA and 23.6% Fib level as key hurdles to further gains. WTI Crude Oil is trading sharply higher on Thursday as oil prices benefit from the combination of falling United States (US) stockpiles and growing optimism around upcoming US–China trade talks, which have raised hopes of a potential de-escalation in tensions between the world’s two largest economies. At the time of writing, WTI is up 2.83% to $59.33, extending its rebound from earlier lows and regaining ground lost in April. US inventories post second weekly decline, tightening outlook This week’s rally has been fuelled by consecutive inventory drawdowns, reinforcing signs of a tightening US oil market. On Tuesday, the American Petroleum Institute (API) — an industry body that issues early supply estimates — reported that US crude stockpiles fell by 4.49 million barrels for the week ending May 3, far exceeding the expected 2.5 million barrel draw. This followed a surprise 3.76 million barrel build the previous week. The official data from the US Energy Information Administration (EIA) released on Wednesday showed a 2.03 million barrel decline, slightly below consensus forecasts. This was the second consecutive weekly drop following a 2.696 million barrel draw the prior week. Despite the lower-than-expected government figure, the back-to-back declines confirm tightening supply or improving demand, both supportive of higher prices. US–China trade talks reignite demand optimism On Tuesday, the US government confirmed that Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will travel to Switzerland this weekend to meet with Chinese officials, marking the first formal trade negotiations in over three months. The announcement boosted market sentiment, as traders interpreted the talks as a signal that tariff pressure could ease. Any progress toward improved industrial relations or reduced trade barriers would likely bolster global crude demand, particularly given China’s role as the largest oil importer. OPEC+ policy remains a stabilizing backdrop While not a fresh development, OPEC+ output policy continues to underpin market expectations. On Saturday, the coalition’s core producers, including Saudi Arabia and Russia, agreed to raise production by 411,000 barrels per day in June as part of a gradual rollback of earlier voluntary cuts. However, the group emphasized that the decision remains flexible, with adjustments possible if market conditions deteriorate. OPEC+ will reassess its policy at its next meeting on June 1, and reiterated its commitment to avoiding oversupply. WTI challenges the $60.00 psychological barrier WTI crude oil is trading near $59.35, pushing into a key resistance zone as momentum improves. Immediate upside is capped at the $60.00 psychological level, which also aligns closely with the 20-day moving average at $60.58 and the 23.60% Fibonacci retracement of the 2025 decline. This confluence around $60.00–$60.60 marks a critical test for bulls. A sustained breakout above this zone would open the door toward the descending trendline resistance near $62.00, followed by the 38.20% retracement at $64.18. On the downside, initial support lies at $58.00, with further buying interest expected at $56.00, and major support resting at the recent low of $54.79. The Relative Strength Index (RSI) has ticked higher to 43.23, showing fading bearish momentum but still lacking confirmation of a full bullish reversal. A daily close above $60.60 would likely signal the start of a more sustained recovery. WTI Crude Oil daily chart WTI Oil FAQs WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia. Source: https://www.fxstreet.com/news/wti-crude-oil-climbs-as-us-inventories-fall-trade-talks-support-demand-outlook-202505081509