Oil prices edged lower on Monday, with West Texas Intermediate (WTI) crude dipping below $61 per barrel as renewed uncertainty over U.S.-China trade relations weighed on market sentiment. The decline reflects investor caution following mixed signals from the Trump administration regarding progress on tariff negotiations.
WTI crude fell to around $60.85, reversing earlier gains as traders reassessed the potential for a resolution in the ongoing trade standoff. Comments from key U.S. officials over the weekend suggested that a deal remains elusive, rekindling concerns about global demand and the broader impact of trade tensions on economic growth.
Energy markets have remained highly sensitive to geopolitical headlines, and oil is once again caught in the crossfire. With trade talks stalled and rhetoric hardening, demand forecasts are being revised downward, raising the risk of oversupply in the coming quarters despite ongoing production cuts by OPEC+.
Adding to the pressure, U.S. crude inventories have remained elevated, dampening hopes for a near-term rebound in prices. While the global supply picture remains relatively balanced, the demand side continues to face headwinds, particularly in key Asian economies where manufacturing data has turned softer.
Technical indicators show WTI struggling to hold above support levels, with selling pressure intensifying near the $61 mark. Analysts warn that if negative sentiment persists, crude could test lower levels in the coming days, particularly if trade rhetoric escalates or fresh inventory data disappoints.
For now, oil traders are watching both the White House and Beijing for clues, with hopes for clarity on trade policy direction. Until then, volatility may remain elevated, and crude prices are likely to remain range-bound, vulnerable to headlines and shifting risk appetite.
