WTI Crude Edges Higher Above $63.50 on US-China Trade Deal Hopes and Inventory Drop

WTI Crude Edges Higher Above $63.50 on US-China Trade Deal Hopes and Inventory Drop

Oil Prices React to Trade Optimism and Supply Surprise

West Texas Intermediate (WTI) crude oil is attracting buyers in the Wednesday Asian session, rising to near $63.80, supported by positive sentiment surrounding US-China trade negotiations and a surprise drop in US crude inventories.

US-China Trade Negotiations Fuel Bullish Sentiment

According to Bloomberg, US and Chinese negotiators have reached a broad outline for implementing the Geneva Consensus, addressing sensitive topics like rare earth shipments and magnets. While full details remain under wraps, the market interprets this as a step toward easing trade tensions between the world’s largest economies.

This progress is bullish for oil markets, as global trade stability typically signals stronger future demand for crude, lifting prices.

Surprise Decline in US Crude Stocks Adds to Support

The American Petroleum Institute (API) reported a 370,000-barrel decline in US crude stocks for the week ending June 6, defying market expectations of a 700,000-barrel build. Although smaller than the previous week’s 3.3 million-barrel drop, the unexpected draw supports the case for tightening supply conditions in the US oil market.

Upcoming Catalysts: US CPI and EIA Data

Looking ahead, traders are closely watching the release of May’s US Consumer Price Index (CPI) data and the EIA Crude Oil Inventories report later on Wednesday. A hotter-than-expected inflation print could increase speculation around Federal Reserve policy, while further supply drawdowns may offer additional upside for oil prices.

Outlook: WTI Supported as Demand and Supply Factors Align

With trade optimism boosting market morale and inventory numbers tightening, WTI crude has technical and fundamental support above the $63.50 level. However, sustained gains will depend on the confirmation of a trade framework and the CPI and EIA results.

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