Oil Prices Hover Below $60 Amid Signs of U.S. China Detente

Highlights:

• West Texas Intermediate (WTI) crude recovered 1% to US$59.60 a barrel at the time of writing, after last week’s sharp 4.2% plunge, the steepest drop since May.
• The rebound followed a softer U.S. stance toward China, with the White House signalling openness to renewed trade discussions between the two biggest oil consumers.
• Analysts caution that oil’s recovery remains fragile as global demand concerns and potential OPEC+ supply increases continue to weigh on market sentiment.

Oil prices remained under US$60 per barrel after signals from Washington that it may ease trade tensions with China, offering tentative support to global demand sentiment. At the time of writing, West Texas Intermediate (WTI) had rallied about 1 % to close at US$59.60, recovering from a sharp drop of 4.2 % earlier in the week — its steepest single-day slide since May.

Shift in Washington’s Tone Alleviates Pressure

The rebound came after the White House adopted a slightly softer posture toward Beijing in the wake of fresh tariff and export control escalations. Markets interpreted the possibility of renewed negotiation as a relief from the escalating trade conflict between the world’s two largest oil consumers. Equity markets also recovered after Friday’s broad selloff, which had weighed on energy shares. This dynamic reflects how sensitive oil markets have become to geopolitical developments: even incremental adjustments in trade rhetoric can sway prices significantly, given the broader concerns around global economic growth and energy demand.

Broader Risks and Supply Factors Remain

Despite the short-term recovery, oil remains vulnerable to downside pressures. The recent rebound is viewed by many analysts as a technical bounce rather than a turn in trend, especially since underlying fundamentals remain weak. Overproduction risks continue to loom — OPEC+ and large exporters may maintain or increase output levels, amplifying excess supply challenges. Additionally, demand concerns tied to economic slowdowns in major consuming economies continue to dampen confidence. If fresh rounds of tariffs or retaliatory trade moves arise, they could undercut any nascent optimism quickly.

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