Oil News: Bullish Outlook Builds as China Demand and Trade Talks Drive Hope

Oil Prices Forecast Firm as Trade Optimism and Supply Mix Drive Rebound

Crude oil prices ended the week higher, posting a 4.68% gain to settle at $61.02 per barrel. Traders responded to signs of easing U.S.-China trade tensions and firm Chinese crude imports, helping to shift sentiment away from earlier supply-driven pressure. This marked a decisive change in tone after prices slumped earlier in the week on bearish fundamentals tied to rising global output.

Trade Optimism Lifts Demand Expectations

Investor focus turned sharply to diplomatic developments, as Washington and Beijing prepared for high-level trade talks scheduled for May 10. The discussions, which may result in a temporary tariff rollback, provided a significant boost to demand sentiment. Market participants expect that even a symbolic thaw in relations between the world’s two largest oil consumers could unlock demand potential. Brent futures rallied 3% on Thursday alone, reflecting this renewed optimism.

China’s Crude Buying Underscores Demand Resilience

April trade data from China added weight to the bullish case. While total crude imports dipped slightly from March, they remained 7.5% higher than the same period last year. State refiners reportedly accelerated purchases during planned maintenance outages, suggesting stockpiling activity and underlying confidence in forward consumption. This data helped alleviate demand-side concerns, particularly as broader Asian consumption remains under scrutiny.

OPEC+ Supply Plan Still Looms Over the Market

Despite the positive demand signals, the supply side remains a headwind. OPEC+ confirmed it will increase crude production by another 411,000 barrels per day in June—the second such rise in two months. The coalition’s plan has revived fears of a supply glut, especially in a market that only recently began to digest earlier output cuts. However, recent reports suggest that unplanned outages in Libya, Venezuela, and Iraq partially offset this scheduled increase, providing some near-term relief.

Market Outlook: Bullish Tilt Supported by Fundamentals

The rebound in prices reflects a clear shift in sentiment, with demand optimism starting to outweigh supply risks. While OPEC+ output plans continue to exert pressure, the market appears increasingly confident that trade negotiations and strong Chinese import trends can underpin further gains. In the near term, the oil prices forecast is bullish, supported by improved demand outlooks and signs of supply moderation from non-OPEC producers.

Technically, with last week’s strong rebound rally, traders have clearly defined the value area for Light Crude Oil at $55.30 to $54.48.

This week, the pivot at $60.09 will determine whether the rally extends into $63.06 or pulls back to at least $57.96.

While the short-term price action suggests the market is consolidating and perhaps forming a support base, the longer-term trend is still weak with prices substantially below the 52-week moving average at $68.60.

More Information in our Economic Calendar.