US-China tariff talks boost market sentiment, WTI crude oil may consolidate
2025-08-12 19:49:00
On Tuesday (August 12), WTI crude oil futures fell during trading, and prices remained in a consolidation pattern for several days.
Tariff talks offer respite for crude oil market
The current market calm stems in part from the extension of US-China tariffs. The decision by both countries to postpone the tariff increase until November 10th has alleviated some of the pressure on the market. Imposing triple-digit tariffs on Chinese goods would have dealt a heavy blow to global economic growth, thereby impacting fuel demand. Traders are now getting some breathing space—but whether this represents a path to an actual agreement or merely a delay remains to be seen.
Expectations of rate cuts provide additional support
Another potential boost comes from weak US labor market data, which has traders more inclined toward a September rate cut by the Federal Reserve. Such a move tends to weaken the dollar, boost stock markets, and, in most cases, boost oil demand. US inflation data will also be released later today—if it's weak, support for a rate cut will intensify. That said, this alone won't lead to a breakout in crude oil prices unless key chart levels are breached.
Geopolitics could quickly reshape market dynamics
Traders can't ignore Friday's planned meeting between Trump and Putin in Alaska. Headline risks from the Russia-Ukraine conflict remain significant: a push for peace could ease sanctions, while a breakdown in talks could mean harsher penalties for Russian oil buyers like India. Commerzbank has already warned that secondary sanctions could be expanded if Friday's meeting fails to produce progress. Such events could send oil prices surging or plummeting overnight, regardless of chart trends.
Outlook: Range-bound trading is more likely to continue
(WTI crude oil daily chart source: Yihuitong)
Until a new geopolitical or economic trigger emerges, oil prices are more likely to trade sideways between $62.70 and $66.60. Buyers appear willing to defend against dips to around $63, but the market hasn't shown the strength to break through $66.64. I would still view pullbacks as potential buying opportunities—but if Friday's meeting brings any surprises, it remains to be seen what happens next.
At 19:40 Beijing time, WTI crude oil was quoted at US$63.54 per barrel, down 0.66%.
Tariff talks offer respite for crude oil market
The current market calm stems in part from the extension of US-China tariffs. The decision by both countries to postpone the tariff increase until November 10th has alleviated some of the pressure on the market. Imposing triple-digit tariffs on Chinese goods would have dealt a heavy blow to global economic growth, thereby impacting fuel demand. Traders are now getting some breathing space—but whether this represents a path to an actual agreement or merely a delay remains to be seen.
Expectations of rate cuts provide additional support
Another potential boost comes from weak US labor market data, which has traders more inclined toward a September rate cut by the Federal Reserve. Such a move tends to weaken the dollar, boost stock markets, and, in most cases, boost oil demand. US inflation data will also be released later today—if it's weak, support for a rate cut will intensify. That said, this alone won't lead to a breakout in crude oil prices unless key chart levels are breached.
Geopolitics could quickly reshape market dynamics
Traders can't ignore Friday's planned meeting between Trump and Putin in Alaska. Headline risks from the Russia-Ukraine conflict remain significant: a push for peace could ease sanctions, while a breakdown in talks could mean harsher penalties for Russian oil buyers like India. Commerzbank has already warned that secondary sanctions could be expanded if Friday's meeting fails to produce progress. Such events could send oil prices surging or plummeting overnight, regardless of chart trends.
Outlook: Range-bound trading is more likely to continue
(WTI crude oil daily chart source: Yihuitong)
Until a new geopolitical or economic trigger emerges, oil prices are more likely to trade sideways between $62.70 and $66.60. Buyers appear willing to defend against dips to around $63, but the market hasn't shown the strength to break through $66.64. I would still view pullbacks as potential buying opportunities—but if Friday's meeting brings any surprises, it remains to be seen what happens next.
At 19:40 Beijing time, WTI crude oil was quoted at US$63.54 per barrel, down 0.66%.
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