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- WTI price gains ground due to a decline in US crude inventories.
- Oil prices may lose ground due to lingering uncertainty surrounding US-China trade talks.
- Fed Chair Powell signaled a more cautious stance on interest rate decisions, citing continued policy uncertainty.
West Texas Intermediate (WTI) crude oil experienced a moderate recovery during Thursday’s Asian trading session, reaching levels around $58.10 per barrel after recent declines. This upward movement is primarily attributed to a reported decrease in crude oil inventories within the United States. The most recent EIA Petroleum Status Report indicated a reduction of 2.032 million barrels in US crude stockpiles for the week ending May 2, providing a degree of support to prices. Market analysts are closely watching inventory levels as a key indicator of supply and demand dynamics within the energy sector.
Despite the positive impact of the inventory data, oil prices continue to face downward pressure stemming from persistent uncertainties surrounding trade negotiations between the United States and China. Given their positions as the world’s two largest consumers of oil, any trade-related tensions between the two nations invariably exert a considerable influence on overall market sentiment. In an effort to reignite stalled negotiations, US Treasury Secretary Steven Mnuchin was scheduled to meet with China’s leading economic representative on May 10 in Switzerland. The outcome of this meeting was highly anticipated by market participants seeking clarity on the future direction of trade relations.
Adding to the complex geopolitical landscape, US President Donald Trump asserted that China had initiated the trade discussions and reaffirmed his reluctance to lower tariffs as a means of encouraging Beijing to engage constructively. Meanwhile, Treasury Secretary Mnuchin adopted a more measured tone, characterizing the planned meeting as a preliminary step rather than an indication of advanced progress in the negotiation process. This cautious outlook served to temper expectations among investors, who remain wary of potential setbacks in resolving the trade dispute. Furthermore, recent statements from Federal Reserve Chair Jerome Powell have suggested a more dovish approach to monetary policy, citing ongoing global economic uncertainties as a key factor influencing future interest rate decisions. This cautious stance from the Fed further contributes to the overall market environment of heightened vigilance and risk aversion.
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