Oil News: Support Holds, but Trade Uncertainty and OPEC Supply Weigh on Outlook

Crude Oil Futures Stabilize, But Trade Tensions Limit Recovery

Light crude futures edged higher Tuesday, attempting to recover from a sharp two-day sell-off that saw prices plunge to $58.95—a multi-year low and key support level sandwiched between notable bottoms at $59.31 and $56.19. Traders are now watching closely to see if this zone holds, as a break lower could accelerate downside momentum, while a defense of support may trigger a corrective move toward the $65.62 pivot.

At 11:15 GMT, Light Crude Oil Futures are trading $60.66, down $0.04 or -0.07%.

Macro Risks Undermine Any Near-Term Rebound

The modest rebound comes as equity markets stabilize, but upside in crude remains capped by intensifying macro pressure. U.S.-China trade tensions escalated sharply following President Trump’s call for “reciprocal tariffs” on all imports.

Beijing responded with defiance, warning it would “fight to the end” against U.S. pressure. The threat of a prolonged trade war between the world’s top two economies has amplified fears of a global recession—one that could significantly dent oil demand growth.

EU officials added to the risk complex by announcing potential 25% counter-tariffs on U.S. goods, further complicating the global trade picture. ING’s Warren Patterson described Tuesday’s bounce as a “relief rally” with little conviction, pointing out that the market had already priced in a large portion of expected demand destruction.

U.S.-Iran Headlines Add Geopolitical Uncertainty

Geopolitics added another layer of complexity. President Trump hinted at direct nuclear talks with Iran, though Tehran downplayed this, saying any dialogue would remain indirect.

According to RBC’s Helima Croft, a successful diplomatic breakthrough could bring more Iranian barrels to market, while a breakdown risks sparking military tension—either outcome could meaningfully sway supply expectations.

Inventory Build, Goldman Forecasts Add Bearish Pressure

Fundamentals also leaned bearish, with a Reuters poll projecting a 1.6 million barrel build in U.S. crude and distillate stocks. Inventory data from API and the EIA is due this week and will be closely scrutinized for demand signals.

Meanwhile, Goldman Sachs cut its crude price outlook, citing recession risks and potential OPEC+ supply increases. The bank sees Brent averaging $62 and WTI $58 in a soft-landing scenario, but projects Brent falling to $54—or even sub-$40—under more severe demand and supply imbalances.

Outlook: Bearish Until Support Proves Durable

The near-term outlook remains bearish unless the $58.95 support level holds firm and is met with a meaningful shift in sentiment. With macro risk dominating the tape and fresh supply concerns looming, rallies are likely to be faded unless technicals and data surprise to the upside.

More Information in our Economic Calendar.