Crude Oil Surges to Two-Week Highs as U.S.-China Trade Talks Bolster Market Sentiment

Oil prices jumped to nearly two-week highs Monday morning as markets responded positively to weekend US-China trade talks. Brent crude futures rose 0.58% to $64.28 per barrel while WTI crude futures gained 0.69% to $61.44.

Both benchmarks extended Friday’s momentum when they surged more than $1 and posted their first weekly gain in three weeks. The primary catalyst driving today’s gains came from “substantial progress” in US-China trade discussions held in Geneva.

US Treasury Secretary Scott Bessent expressed optimism about the vital trade negotiations, with a joint statement expected later today. Chinese Vice Premier He Lifeng confirmed the positive developments, suggesting both sides reached important consensus.

Despite the upward momentum, gains remain capped by OPEC+ plans to accelerate production increases. The producer group recently announced a significant output hike of 411,000 barrels per day for June 2025.

This continues their systematic unwinding of previous cuts that have supported prices since 2022. Compliance issues within OPEC+ further complicate the supply picture.

Kazakhstan exceeded its quota by 384,000 barrels per day in March. Saudi Arabia reportedly pushes for faster rollbacks of output reductions to penalize members with inadequate compliance.

Technical indicators show WTI crude breaking above its downtrend line and crossing the psychologically important $60 barrier. The price rebounded from critical support at $55.40 last week, potentially forming a double bottom pattern.

Momentum indicators suggest the bullish move might continue toward the next resistance at $64. Traders also monitor the potential US-Iran nuclear talks.

Discussions between Iranian and American negotiators concluded in Oman on Sunday, with further talks planned. Any agreement could increase global oil supply and pressure prices downward.

Global inventory trends show declining stocks, with OECD commercial oil inventories approximately 2.3% below their five-year average. This suggests room for additional supply without dramatically impacting prices.

Year-to-date performance remains negative for both benchmarks. Brent has dropped 13.93% while WTI has fallen 14.33% since January. Trading Economics forecasts WTI crude reaching $61.90 by quarter’s end, with Brent climbing to $64.78.

Market analyst Toshitaka Tazawa noted, “The optimism regarding productive US-China talks bolstered market sentiment, although OPEC’s strategy to increase output limited the gains.”

Traders now await the joint statement from US-China officials and upcoming US inventory data for further price direction.

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