West Texas Intermediate (WTI) crude oil prices gained momentum on Wednesday, climbing to a one-week high during the Asian trading session. The commodity is currently trading around $59.40 per barrel, marking an over 1% increase for the day. This follows a recovery from the $55.00 psychological level, which had represented a nearly one-month low earlier in the week.
The positive price movement comes in response to news that the US and China—two of the world’s largest economies—will initiate trade talks this weekend. The announcement has eased market concerns over demand and contributed to a more optimistic sentiment in the oil market. Additionally, expectations of tighter US oil supplies are providing further support to prices, with some US energy firms reducing rig activity in response to lower crude oil prices.
Crude oil prices are also buoyed by persistent geopolitical risks, including the ongoing Russia-Ukraine conflict and fresh tensions in the Middle East. Moreover, hopes for stronger fuel demand in China are helping to sustain market sentiment. However, the OPEC+ decision to accelerate production increases has raised concerns over potential oversupply, which could limit further gains.
Meanwhile, the US Dollar has regained some strength after a three-day losing streak, driven by repositioning ahead of the upcoming Federal Open Market Committee (FOMC) policy meeting. A stronger dollar could put downward pressure on crude oil prices, as it makes the commodity more expensive for holders of other currencies.
Market participants are also awaiting government data on US oil stockpiles, with the outcome of the FOMC meeting expected to remain a key focal point for traders in the coming days.
