Oil News: WTI Nears 200-Day Moving Average as Bullish Oil Outlook Builds

Oil Prices Firm as US-China Trade Talks and Saudi Shipments Drive Sentiment

Crude oil futures edged higher on Tuesday, supported by optimism surrounding ongoing U.S.-China trade negotiations and supply signals from Saudi Arabia. With West Texas Intermediate (WTI) testing critical resistance near the 50% retracement level at $66.05 and the 200-day moving average at $66.47, traders are watching for a potential breakout toward $68.21.

At 11:08 GMT, Light Crude Oil Futures are trading $65.64, up $0.35 or +0.54%.

US-China Trade Optimism Supports Oil Price Forecast

Oil prices are finding firm footing as markets await the outcome of trade talks between the U.S. and China, which resumed in London for a second day. Comments from President Donald Trump, saying negotiations were progressing well, helped bolster sentiment. A successful agreement is expected to improve the global economic outlook, lifting demand for crude and other commodities.

Monday saw Brent hit $67.19—its highest since late April—helped by a weaker U.S. dollar, which dropped 0.3% on the DXY index. The decline made crude more attractive for buyers using other currencies. WTI also posted a strong 6.2% gain last week, with much of the move attributed to improving trade expectations and favorable U.S. jobs data, according to Goldman Sachs.

Saudi Aramco Export Cuts Raise Questions on OPEC+ Output Plans

Adding to bullish sentiment, Saudi Aramco is set to reduce July crude exports to China by 1 million barrels compared to June, despite OPEC+ announcing a 411,000 barrels per day production increase for the same month. This move challenges assumptions that the cartel’s phased supply hike would flood the market.

“After all these unwinds, one would have thought that we would be getting more from Saudi Arabia,” said Onyx Capital Group’s Harry Tchilinguirian, hinting that output restraint may persist informally.

A Reuters survey showed that OPEC output rose by just 150,000 bpd in May to 26.75 million bpd. Iraq’s compensatory cuts and moderate increases from Saudi Arabia and the UAE meant total additions were limited.

Iran Nuclear Deal Uncertainty Caps Bullish Momentum

Geopolitical risk from Iran remains on the radar. Tehran is preparing a counter-proposal to the U.S. on a nuclear agreement, but differences over uranium enrichment persist. Easing sanctions on Iran could reintroduce barrels into the market, tempering the bullish tone.

Market Forecast: Bullish Bias with Caution Around Resistance Levels

The technical picture suggests bullish momentum could continue if WTI clears the 200-day moving average at $66.47 with conviction. While support holds firm at $62.59, fundamental backing from improving trade sentiment, restrained OPEC+ additions, and supply risks from Canada reinforces an upside bias in the short term.

Traders should monitor breakout potential closely while factoring in resistance pressure and geopolitical overhangs.

More Information in our Economic Calendar.