Will oil prices continue their short-term uptrend?
Crude oil prices closed 0.47% lower on Tuesday, after extending their short-term uptrend and reaching slightly above the $66 level. The market has been advancing as U.S.-China trade deal news emerged, along with expectations of easing monetary policy following lower-than-expected inflation data. Today, crude oil prices are 1.8% higher, again breaking the key $66 level.
For oil markets specifically, these developments are worth monitoring:
- U.S.-China trade progress - Officials agreed on a framework to restore their trade truce and resolve China's export restrictions on rare earth minerals and magnets after two days of negotiations in London.
- U.S.-Iran nuclear tensions - President Trump expressed less confidence that Iran would agree to stop uranium enrichment in a nuclear deal, while Iran threatened to strike US bases in the Middle East if nuclear negotiations fail
- OPEC+ supply plans - The group plans to increase oil production by 411,000 barrels per day in July, marking the fourth consecutive month of unwinding production cuts.
- U.S. inventory data - Markets are awaiting the weekly US oil inventories report from the Energy Information Administration, with API figures showing US crude stocks fell by 370,000 barrels last week
Conclusion
Crude oil continues its short-term uptrend this morning. However, the market is hovering around the important $66 resistance level. No negative signals are evident at this time. The next potential resistance is at $67-70, marked by the large daily gap down from April 3.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil prices remain near the $66 level today.
- However, ongoing tariff-related volatility, combined with economic data, is adding to market uncertainty.
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Thank you.
Paul Rejczak,
Stock Trading Strategist
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