Trade talks provide temporary relief
After two days of intense negotiations in London, major economies reached a framework agreement on restarting trade discussions. US Commerce Secretary Howard Lutnick noted the framework still requires President Trump’s final approval.
“From an oil market perspective, this development helps mitigate some downside risks, particularly by supporting economic stabilization in both major economies, which should bolster future crude demand and price performance,” observed IG market analyst Tony Sycamore.
OPEC+ supply increase weighs on prices
Meanwhile, the OPEC+ alliance continues its production ramp-up, adding to market supply pressures. Member countries decided to increase output by 411,000 barrels per day in July – marking the fourth consecutive month of gradual easing from previously implemented production cuts. This measured increase reflects OPEC+’s delicate balancing act between market supply management and competitive share considerations.
“While the trade breakthrough eases some global economic concerns, short-term demand weakness combined with OPEC+ production increases continues to dominate market sentiment,” noted an energy analyst from a market research firm.
Inventory data takes center stage
Markets are closely watching upcoming US official crude inventory figures for fresh supply-demand signals. Analysts surveyed by Bloomberg expect a 2-million-barrel drawdown in US crude stocks for the week ended June 6, while gasoline and distillate inventories may rise.
This projection exceeds the 370,000-barrel decline reported by the American Petroleum Institute (API). “If official data confirms a significant drawdown as expected, it could provide short-term price support,” analysts suggested.
Technical analysis: WTI trapped in consolidation
WTI’s daily chart shows prices remain within their established trading range. Over recent sessions, the contract has oscillated between 64−67, with short-term moving averages converging – indicating increasing investor indecision.
The MACD indicator shows narrowing momentum bars, signaling weakening market energy. A breakdown below 64supportcouldopenfurtherdownsidetowardthe62 area, while a breakout above 67resistancemightreignitetheuptrendtowardthe70 psychological level.
Market outlook
Current price action reflects a classic tug-of-war between:
Bullish factors: Trade talk progress boosting economic outlook
Bearish factors: OPEC+ supply increases and sluggish demand
“Oil prices are caught in a consolidation pattern, with traders awaiting fresh directional cues – particularly from US inventory data – to break this equilibrium,” concluded the editorial analysis.
At press time, Brent crude held at 66.63whileWTItradedat64.77, both showing limited movement as markets digested mixed fundamental signals.
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