Oil Prices Rebound as Trump Eases China Trade Tensions
Oil prices recover as Trump softens his stance on China trade tensions
FUNDAMENTAL OVERVIEW:
Oil prices edged higher on Monday, rebounding from steep losses in the previous session after U.S. President Donald Trump’s softer comments on China eased market fears over escalating trade tensions. Both benchmarks had dropped nearly 4% to five-month lows on Friday after Trump announced plans for an additional 100% tariff on Chinese imports, raising concerns about global demand.
However, Trump struck a calmer tone over the weekend, assuring markets that the U.S. was not seeking immediate escalation, which helped stabilize sentiment. Still, traders remained cautious amid uncertainty surrounding U.S.-China relations. Meanwhile, Beijing defended its export restrictions on rare earth elements as a justified response but refrained from imposing new tariffs on U.S. goods.
Geopolitical tensions eased further after a U.S.-brokered ceasefire between Israel and Hamas, limiting oil’s upside momentum. Market sentiment, however, remains fragile as oversupply concerns persist. The U.S. Energy Information Administration (EIA) raised its 2025 crude production forecast to a record 13.53 million barrels per day, signaling stronger supply growth. Additionally, OPEC+ confirmed a modest 137,000 barrels per day output increase for November to maintain market balance. In its latest monthly report, OPEC left global oil demand growth estimates unchanged for 2025 and 2026, suggesting a narrower supply deficit ahead.
CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Crude Oil is trading within a down channel.
Crude Oil is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Neutral Zone, while the Stochastic oscillator suggests Negative trend.
Immediate Resistance level: 61.35
Immediate support level: 58.00
HOW TO TRADE CRUDE OIL
Following a steep sell-off, Crude Oil found temporary support and staged a sharp rebound; however, the recovery quickly lost momentum, with prices resuming their downtrend to form new lower lows. The commodity has now breached a key support level with a strong bearish candle, reinforcing downside pressure. As long as prices remain below this threshold, the outlook stays negative, with potential for further declines toward the next major support zone.
