West Texas Intermediate (WTI) US Crude Oil prices are struggling to build on modest gains from Friday, encountering resistance near the $61.60 mark as fresh selling pressure emerges at the start of the week. Currently hovering around $60.70-$60.65, the commodity is down over 0.50% for the day, though the selling remains lackluster amidst mixed fundamental signals.
Investor sentiment is clouded by concerns that the escalating trade conflict between the US and China—the world’s two largest economies—could dampen global economic growth, subsequently weakening fuel demand. This anxiety, compounded by oversupply fears, is proving to be a significant headwind for crude oil prices. In a surprise move, eight OPEC+ members decided to advance a planned production increase, returning 411,000 barrels per day (bpd) to the market starting in May.
Despite these bearish factors, the downside for oil remains limited, supported by sustained weakness in the US Dollar. Market expectations that the Federal Reserve will resume its rate-cutting cycle and reduce borrowing costs by at least three times before the end of the year have driven the USD to its lowest point since April 2022, offering some relief to USD-denominated commodities like crude oil.
Additionally, comments from US Energy Secretary Chris Wright on Friday, suggesting the US could curb Iran’s oil exports as part of President Trump’s strategy to pressure Tehran over its nuclear program, have helped limit deeper losses for crude prices, adding an element of caution for bearish traders.
