WTI crude oil price holds near $61 as U.S.-China trade optimism limits downside risk
WTI crude oil faces resistance at $61.60 after failed breakout attempt
WTI crude oil futures are trading near $61 per barrel on Friday, poised for a weekly gain as optimism surrounding the U.S.-China trade relations overshadowed concerns about global oversupply. The two countries recently agreed to a 90-day truce in their trade dispute, reducing tariffs and easing fears of diminishing oil demand from the world’s top two oil consumers.
However, gains were capped by expectations that U.S.-Iran negotiations may result in a deal for sanctions relief, potentially increasing Iranian oil supply. Additionally, U.S. government data showed a surprise build in crude inventories, and the International Energy Agency (IEA) raised its global supply forecast by 380,000 barrels per day, further weighing on prices.
USOIL price dynamics (May 2025) Source: TradingView.
Global supply concerns and economic data shape oil sentiment
Despite easing trade tensions, WTI crude faced headwinds from concerns about rising global oil supply. The IEA's updated forecast for 2025 anticipates an increase of 380,000 barrels per day from non-OPEC+ producers, including a surge in output from Saudi Arabia and other OPEC+ members. Meanwhile, U.S. crude inventories showed a surprise 3.4 million barrel build, further amplifying concerns about oversupply. These developments have helped moderate price gains, with WTI crude hovering near the $61 mark despite broader optimism.
For now, oil prices remain supported by positive trade sentiment, but rising supply concerns continue to cap upside potential. WTI and Brent crude both gained roughly 1% this week, aided by the 90-day tariff pause between the U.S. and China, two of the world’s largest energy consumers. Nonetheless, expectations of increased supply and the possibility of easing sanctions on Iran weigh heavily on sentiment.
WTI technical outlook: Resistance at $61.60 and support at $60.18
From a technical perspective, WTI crude remains under pressure after breaking below the rising channel earlier this week. The price briefly attempted a bounce but was rejected near the $61.64 pivot, forming a shooting star candle—a potential signal for hesitation in the bullish trend. The 50-period EMA at $61.60 has now flipped into resistance, and the failure to reclaim this level suggests the risk of further downside.
The immediate downside risk extends toward $60.18, with a further break potentially exposing the $58.93 level. Traders will need to watch whether the price can reclaim the EMA and push above the $61.64 resistance for the potential to resume the uptrend. Otherwise, the current technical structure remains cautious, with no strong bullish patterns emerging yet.
Brent crude price forecast: Indecisive momentum near $64
Brent crude oil is trading at $64.19, struggling below the 50-period EMA at $64.68 after failing to reclaim the $65.19 pivot. The price remains wedged between a rising trendline from May 2 and a descending trendline from April highs, forming a tightening triangle pattern. While this setup often precedes a breakout, momentum remains indecisive. A breakdown below $63.44 would invalidate the ascending trendline and expose $62.28. Conversely, a break above $65.19 would clear the way for a bullish move toward $66.
As previously discussed, the technical outlook for WTI crude remains cautious with a clear resistance zone near $61.60. Traders will closely monitor the $60.18 support level for any signs of further downside, with a failure to hold this area likely opening the door for a deeper correction.
