In early Asian trading hours on Wednesday, West Texas Intermediate (WTI) crude oil is trading around $63.80. The price edges higher as the market reacts to positive developments in trade negotiations between the United States and China. Investors are also awaiting two key events later in the day: the release of the US May Consumer Price Index (CPI) and the EIA Crude Oil Inventory report.
Trade Agreement Hopes Boost Global Demand Outlook
According to Bloomberg, the US and China have reached a preliminary agreement on how to implement a previous understanding reached in Geneva. US negotiators stated that they “fully expect” issues related to exports of rare earth minerals and magnets to be resolved under this framework. Although the full details of the deal have not been released, analysts believe that any trade agreement between the world’s two largest economies could support oil prices by strengthening global economic growth and boosting demand.
Meanwhile, the latest weekly report from the American Petroleum Institute (API) showed US crude stockpiles declined by 370,000 barrels for the week ending June 6. This figure is significantly lower than the 3.3 million-barrel draw seen the previous week and falls short of market expectations for a 700,000-barrel increase.
On the geopolitical front, Iran announced that it would soon submit a counter-proposal in response to what it called an “unacceptable” US offer regarding the revival of the nuclear deal. Any easing of US sanctions on Iran could allow Tehran to export more oil, potentially capping the upward momentum in oil prices.
WTI Analysis
WTI crude has recently broken above a key resistance zone between $63.515 and $64.695 after a prolonged consolidation phase. The price is now pulling back to retest this area, which is expected to act as new support.
Key Levels:
- Current Support Zone: $63.515 – $64.695 (retest of the breakout zone)
- Intermediate Support: $59.882
- Lower Support: $58.005 – $57.485
- Primary Upside Target: $70.705 – $71.885 (supply zone)
- Final Target: $73.000 (psychological & macro resistance)
Potential Scenarios:
As long as the price holds above $63.5, the bullish outlook remains valid.
A confirmed breakout above $64.7 could trigger a strong rally toward the $70.7–$71.8 supply zone.
If the $63.5 support fails, the next key support lies near $59.8.
Conclusion:
WTI crude is showing bullish momentum in the short term. The current pullback to the previous resistance zone could offer a potential buying opportunity for trend-following traders.
A confirmed break and hold above $64.7 would open the door for further gains toward the $71 area.
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