Crude oil futures ended the week higher, buoyed by renewed optimism around U.S.-China trade talks and signs of tightening inventories. West Texas Intermediate (WTI) settled near $59.91, marking a 2.78% weekly gain after rebounding sharply from multi-year lows earlier in the week. Bargain buying and improved sentiment supported prices despite strong macroeconomic and supply-driven headwinds.

Trade Talks and Risk Sentiment Offer Limited Relief

The upcoming May 10 trade negotiations between U.S. Treasury Secretary Scott Bessent and China’s top economic official have helped underpin crude prices. As the world’s top two oil consumers, any thaw in trade relations could provide much-needed demand support. Analysts flagged improved investor sentiment tied to hopes of reduced tariffs, though warnings persist that volatility from tariff headlines will continue to impact price action.

Additionally, a new U.S.-UK trade agreement, including industrial and pharmaceutical cooperation, further lifted overall market sentiment. However, analysts caution that trade-induced gains could be fleeting unless supported by broader economic improvement and clearer demand signals.

OPEC+ Supply Strategy Caps Gains

OPEC+ remains a key source of downside pressure. The group confirmed a second straight month of production hikes, adding 411,000 barrels per day in June. This lifts total output additions since April to nearly 1 million bpd. Saudi Arabia’s push to unwind voluntary…

Crude oil futures ended the week higher, buoyed by renewed optimism around U.S.-China trade talks and signs of tightening inventories. West Texas Intermediate (WTI) settled near $59.91, marking a 2.78% weekly gain after rebounding sharply from multi-year lows earlier in the week. Bargain buying and improved sentiment supported prices despite strong macroeconomic and supply-driven headwinds.

Trade Talks and Risk Sentiment Offer Limited Relief

The upcoming May 10 trade negotiations between U.S. Treasury Secretary Scott Bessent and China’s top economic official have helped underpin crude prices. As the world’s top two oil consumers, any thaw in trade relations could provide much-needed demand support. Analysts flagged improved investor sentiment tied to hopes of reduced tariffs, though warnings persist that volatility from tariff headlines will continue to impact price action.

Additionally, a new U.S.-UK trade agreement, including industrial and pharmaceutical cooperation, further lifted overall market sentiment. However, analysts caution that trade-induced gains could be fleeting unless supported by broader economic improvement and clearer demand signals.

OPEC+ Supply Strategy Caps Gains

OPEC+ remains a key source of downside pressure. The group confirmed a second straight month of production hikes, adding 411,000 barrels per day in June. This lifts total output additions since April to nearly 1 million bpd. Saudi Arabia’s push to unwind voluntary cuts faster has put pressure on non-compliant members, but it also threatens to deepen the global supply glut.

Inventories remain elevated, with Vortexa data showing a 150 million barrel build in global crude stocks since mid-February. This oversupply is compressing the Brent futures curve, briefly pushing the prompt spread into contango—a structure typically bearish for crude.

U.S. Output and Inventory Data Send Mixed Signals

On the domestic front, the U.S. Energy Information Administration (EIA) reported a 2 million barrel draw in crude inventories last week, well above expectations. Declines at the Cushing hub and a five-year high in jet fuel demand suggest some firming in consumption. However, gasoline inventories rose by 200,000 barrels, raising concerns about weak domestic demand heading into the driving season.

U.S. output remains under scrutiny. While some shale producers like Diamondback Energy and Coterra Energy have reduced rigs, the EIA slightly revised down its output forecast. U.S. production is now expected to average 13.42 million bpd this year, down from 13.51 million previously. Still, caution prevails as rig cuts may take time to translate into meaningful supply-side tightening.

Oil Prices Forecast Mixed as Risks Mount

Price forecasts continue to reflect market uncertainty. Citi Research cut its Brent outlook to $55 per barrel, citing a 60% probability of a U.S.-Iran nuclear deal that could add significant supply. A successful deal could pull prices down to $50, while failure might push them back above $70. Barclays and Goldman Sachs have also trimmed projections, pointing to weak fundamentals and growing downside risk.

Meanwhile, ANZ and ING maintain a more cautious tone, warning that even modest rallies are likely to face selling pressure unless broader demand improves or OPEC+ reverses course.

Weekly Light Crude Oil Futures

WTI

Trend Indicator Analysis

The main trend is down according to the weekly swing chart. A trade through $64.87 will change the main trend to up. A trade through $54.48 will signal a resumption of the downtrend.

The long-term range is $52.45 to $84.90. Its 50% level is $68.67. This is major resistance. Trading on the bearish side of this key level is a sign of weakness. Additional resistance is the 52-week moving average at $68.58.

The short-term range is $71.64 to $54.48. Its pivot at $63.06 is resistance.

The minor range is $64.87 to $55.30. Its pivot is $60.09. Trader reaction to this level is likely to set the tone next week.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending May 16 is likely to be determined by trader reaction to $60.09.

Bullish Scenario

A sustained move over $60.09 will signal the presence of counter-trend buyers. If this creates enough momentum, we could see a possible near-term rally into the major pivot at $63.06.This is the last potential resistance before the main top at $64.87 and the trigger point for a change in trend and an upside breakout.

Bearish Scenario

A sustained move under $60.09 will indicate the presence of sellers. This will leave the market vulnerable to another plunge into the value zone at $55.30 to $54.48. This is followed by a multi-month low at $52.45. If this level fails then look out to the downside.

Market Outlook: Bearish Bias with Potential for Temporary Rallies

Despite this week’s bounce, driven by bargain buying and trade optimism, the fundamental backdrop remains bearish. Persistent supply growth, especially from OPEC+, and only tentative signs of demand recovery suggest rallies may be capped. Unless WTI can hold decisively above $60.09 and absorb incoming supply without fresh inventory builds, price action is likely to revert toward the $55.30–$54.48 value zone.

Each of these factors—OPEC+ supply growth, geopolitical negotiations, inventory trends, and price forecast revisions—feeds into a market still wrestling with imbalance. While temporary rallies may offer intraday trading opportunities, the broader direction remains pressured by structural oversupply and uneven demand signals. The near-term oil prices forecast is bearish. Traders should remain cautious, as rallies into resistance are likely to be met with selling, especially if trade talks fail to produce tangible results or if inventory data disappoints.

Technically, a counter-trend breakout over $60.09 could face headwinds at $63.06 to $64.87. However, we’re more likely to see a two-sided trade that straddles the $60.09 pivot.