WTI crude oil steadies near $59.8 amid U.S.-China tensions and fragile technicals

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WTI oil U.S.-China tensions

Highlights

- WTI crude rebounded slightly to $59.8 after last week’s five-month low.

- Trump’s shift in tone toward China provided brief support for energy sentiment.

- Technical outlook remains bearish with resistance at $61.5 and support near $58.5–$59.

His comments followed threats of a 100% tariff hike on Chinese imports, which had reignited fears of a prolonged trade war. While the softer rhetoric offered short-term relief, the broader technical and macro backdrop continues to highlight weakness in crude markets.

Technical pressure remains dominant

From a technical standpoint, WTI has broken decisively below its consolidation pattern, which had confined price movement between $62 and $60 in recent sessions. The breakdown triggered strong selling interest, pushing the commodity under the critical $60 level for the first time since spring. The inability to hold above the $61.5–$62 support range—aligned with the 50- and 100-period exponential moving averages—signals that bearish momentum remains intact.

WTI crude oil price dynamics (Source: TradingView)

Price now trades beneath all major moving averages, with the 200-period EMA at $62.88 acting as a ceiling rather than support. The Parabolic SAR readings remain above price action, underscoring that sellers still control short-term direction. Momentum and volume indicators confirm this trend, suggesting continued pressure unless a sharp recovery unfolds.

Immediate support sits around $58.5–$59, an area corresponding to March’s swing low. A close below that range could expose the $57 level, which marks the next major downside target. For a sustainable rebound, crude would need to reclaim and hold above $61.50, which could allow a retest of $63 and $65. However, traders remain cautious, with sentiment constrained by macroeconomic uncertainty and fading risk appetite.

Macro risks cloud sentiment

Beyond chart dynamics, the market remains preoccupied with demand-side concerns and global trade uncertainty. Trump’s weekend remarks have reduced fears of immediate escalation with China, but Beijing’s ongoing restrictions on rare earth exports highlight the fragility of negotiations. Any renewed confrontation could once again dampen the global growth outlook and energy demand projections.

Meanwhile, geopolitical developments continue to add complexity. Trump’s declaration that the Gaza war is “over” has eased short-term concerns about supply disruptions in the Middle East. Still, traders remain wary of any potential flare-ups in the region that could reverse recent stability. In the near term, market attention will stay focused on trade developments and macro indicators that could influence risk sentiment and fuel demand.

Outlook

In the sessions ahead, the $59 handle will serve as a critical pivot for near-term direction. Holding above this level may allow for a technical rebound, while a sustained drop below could trigger a deeper decline toward $57.

Previously, we discussed WTI’s difficulty in sustaining upward momentum amid overlapping economic and geopolitical pressures. The current setup reinforces that view, with global uncertainty and weakening technicals keeping upside potential limited. Until the market sees stronger evidence of demand recovery or trade stabilization, oil prices are likely to remain under pressure within a defensive trading range.

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