The international crude oil market is experiencing a "rise and then fall" trend. After China and the U.S. reached a partial tariff alleviation agreement, oil prices hit a near two-month high but soon retreated, and the market entered a short-term fluctuation and consolidation phase.
China-U.S. Agreement Boosts Market Confidence, Oil Prices Surge
On Monday, Brent crude futures rose by $1.05, or 1.6%, closing at $64.96 per barrel; U.S. WTI crude rose by 93 cents, or 1.5%, closing at $61.95 per barrel, both marking the highest closing prices since April 28. This uptick mainly benefited from the interim tariff reduction agreement reached between the U.S. and a major Asian country.
The market generally considers the agreement to have eased ongoing trade tensions, aiding the global economic outlook, and sparked expectations for a recovery in oil demand. ING analysts noted, "Although uncertainties remain in negotiations, the tariff reduction exceeded expectations, noticeably warming market confidence."
Policy Tug-of-War Intensifies, Fed's Hawkish Signal Triggers Short-Term Volatility
However, oil prices fell on Tuesday, returning the market to caution. Fed Governor Adriana Kugler remarked that if trade conditions continue to improve, the Fed might not need to further stimulate the economy through rate cuts. This comment raised market concerns that macroeconomic policy support for oil demand growth might weaken, putting short-term pressure on oil prices.
Meanwhile, over the past month, trade disputes escalating caused oil prices to briefly drop to a four-year low, compounded by OPEC unexpectedly increasing output, leaving the market facing the dual shock of supply and demand imbalance.
OPEC Adjusts Export, Saudi Arabia Optimistic About Demand Recovery
On the supply and demand front, favorable news continues to emerge. Iraq, OPEC's second-largest oil producer, forecasts exports in May and June will drop to approximately 3.2 million barrels per day, significantly lower than previous monthly averages, providing tangible support to the global oil market. Meanwhile, Saudi Aramco expresses optimism about future demand, stating that if China-U.S. relations further stabilize, the oil market recovery could be more sustainable.
Technical Analysis: Short-Term Trend Bullish, Focus on Key Support Levels
From a technical chart perspective, WTI crude prices have now broken above the previous consolidation range and stabilized above the $60 threshold, with the short-term structure leaning bullish. The daily chart shows prices consistently closing above the 20-day and 50-day moving averages, with bullish momentum clearly strengthening.
The MACD indicator shows the red bar extending, with the fast line consistently above the slow line, technically supporting the continuation of the rise. If the future can maintain the short-term support of $61.50, the target may challenge the $64.50 annual high area; however, if the $60 threshold is breached, caution is needed as the risk of correction intensifies.
