WTI crude oil is trading at roughly $63.25 as of Wednesday’s Asian trading session, having risen due to decreased US-China trade tensions, which have lessened concerns of an economic recession.
Over the weekend in Switzerland, the US and China agreed to significant tariff reductions. US President Donald Trump agreed to lower additional tariffs on Chinese imports imposed in April of this year from 145% to 30%. In return, China will reduce duties on US imports from 125% to 10%. These lower tariff rates will be in effect for 90 days. This temporary reduction in tariffs between the world’s two largest oil consumers has the potential to boost the West Texas Intermediate (WTI) price in the short term.
The API weekly report revealed a 4.287 million barrel increase in US crude oil stockpiles for the week ending May 9, contrary to the previous week’s 4.49 million barrel decrease and market expectations of a 2.4 million barrel drop.
OPEC+ is expected to increase oil exports in May and June, potentially limiting price increases. Since April, OPEC’s oil production has risen more than anticipated, with a projected daily increase of 411,000 barrels in May.