Oil News: Bullish Oil Outlook on U.S.-EU Deal, OPEC+ Supply Discipline, and China Talks

U.S.-EU Tariff Deal and China Talks Support Market Sentiment

Crude oil prices climbed Monday, supported by the U.S.-EU trade pact that eliminated the threat of 30% tariffs on European goods and redirected attention to energy cooperation.

The deal includes a pledge for $750 billion in EU purchases of U.S. energy, signaling stronger transatlantic ties and lifting broader market sentiment.

Expectations for an extension of the U.S.-China tariff truce, with talks scheduled in Stockholm, added to the optimism.

Analysts say the agreement removes a layer of trade risk and shifts market focus back to oil fundamentals.

However, the rally is tempered by ongoing bearish factors such as a strong U.S. dollar and falling Indian crude imports, according to PVM’s Tamas Varga.

At 11:30 GMT, Light Crude Oil futures are trading $65.98, up $0.82 or +1.26%.

OPEC+ Supply Strategy Remains on Track

On the supply side, OPEC+ is expected to maintain its output plan when it meets Monday.

Reuters reports that the group will likely proceed with an additional 548,000 barrels per day in September, part of the broader plan to unwind 2.2 million bpd in voluntary cuts by quarter-end.

ING forecasts the group will stay the course barring any unexpected market shocks.

Meanwhile, Venezuela’s PDVSA is preparing to resume swap-based exports if the U.S. reinstates partner authorizations. While volumes would be modest initially, any re-entry of Venezuelan barrels introduces potential downside risk later in the year.

Saudi Arabia Set to Raise Crude OSPs Again on Tight Market

Asian refiners expect Saudi Arabia to hike its official selling prices (OSPs) for a second consecutive month in September. The Arab Light benchmark could rise by as much as $1.05/bbl to a five-month high of $3.25 over the Oman/Dubai average. Strong demand in Asia and limited summer exports continue to support prices.

Chinese refiners are running at elevated rates to meet rising domestic fuel demand and restock low inventories. These trends are reinforcing the bullish sentiment, particularly in the physical market for Middle East grades.

WTI Technicals Suggest Rangebound Bias Above Key Support

On the technical front, front-month WTI futures are trading at $65.94, up 1.2%, and holding above key moving averages.

The 200-day and 50-day SMAs at $64.04 and $63.90, respectively, are now serving as support, with a price floor reinforced by the recent low at $64.11. Resistance sits near $68.34, with a breakout potentially targeting the next upside level at $69.89.

The recent consolidation near the 65–66 range reflects a market seeking direction, though support levels appear firm for now. A drop below $64 would expose downside to $62.69.

Crude Oil Outlook: Bullish Tilt as Trade Clarity and Supply Constraints Dominate

With geopolitical trade tensions easing and OPEC+ staying disciplined on supply, near-term oil sentiment remains bullish. Rising Saudi OSPs, firm Asian demand, and technical support reinforce the case for higher prices—though gains may be capped without a fresh breakout above $68.34.

More Information in our Economic Calendar.