West Texas Intermediate (WTI) crude oil extended its recovery, climbing to $71.25 per barrel, but the rally showed signs of exhaustion as demand concerns and market uncertainty kept upside gains in check. While the rebound reflects a temporary easing in oversupply fears, traders remain cautious about the broader outlook.
The recovery in WTI crude followed a slight pullback in US crude inventories, offering some relief after recent selling pressure drove prices to year-to-date lows. However, weak global demand signals and concerns over the US-China trade dispute continue to weigh on sentiment, preventing a stronger breakout.
Meanwhile, US Treasury yields dipped, providing some support to risk assets, but the broader macro outlook remains uncertain. With the Federal Reserve maintaining a cautious stance on interest rates, energy markets are struggling to find clear direction, leaving crude prices vulnerable to swings in sentiment.
Adding to the uncertainty, OPEC+ production cuts have done little to boost prices as market participants focus on slowing demand growth. While some analysts expect seasonal factors and geopolitical risks to provide support, the absence of strong bullish catalysts has kept crude’s rally in check.
Looking ahead, traders will closely monitor US economic data, inflation reports, and further developments in global trade negotiations. Any signs of a weakening economic backdrop could reinforce demand concerns, capping further gains for WTI.
For now, crude oil remains in a fragile recovery, with $71.25 acting as a key resistance level. Unless market fundamentals improve, WTI may struggle to maintain upside momentum, keeping traders on edge amid ongoing volatility.
