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14 May 2025,10:31

Daily Market Analysis

Crude Oil Rises on Trade Optimism and Weak Dollar

14 May 2025, 10:31

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 Key Takeaways:

*Oil Gains on Trade Progress: Positive U.S.-China trade talks have improved the outlook for global energy demand.

*Weaker Dollar Supports Commodities: Lower-than-expected U.S. inflation data has pressured the dollar, supporting crude prices.

Market Summary:

Crude oil prices extended gains as renewed optimism over U.S.-China trade relations and a weaker U.S. dollar boosted market sentiment. The easing of tariff tensions between the world’s two largest economies has been a key driver, with both sides recently concluding trade talks on a positive note. U.S. officials highlighted progress toward reducing the trade deficit, while Chinese representatives emphasized reaching “important consensus.” These developments are seen as a catalyst for restoring disrupted trade flows, thereby supporting global energy demand and reinforcing oil’s bullish momentum.

Further supporting crude prices is the depreciation of the U.S. dollar, which typically enhances oil affordability for holders of other currencies. The softer dollar came after U.S. CPI data missed expectations, fueling market expectations that the Federal Reserve will maintain a dovish stance. A prolonged period of low interest rates tends to benefit commodities, including crude oil, as it supports broader risk appetite and global growth prospects.

Technical Analysis

Crude Oil, H4

Crude oil remains well-bid and is currently testing the key resistance level at $64.50. While the uptrend remains intact, technical indicators suggest signs of slowing momentum. 

The MACD histogram shows a waning bullish trend, and the RSI reading of 68 indicates the market is approaching overbought territory. If the price fails to break above the $64.50 resistance level, a near-term consolidation may follow, with the price likely to trade within the $64.50–$61.85 range. 

Conversely, a successful breakout above $64.50 could pave the way for a further rally toward the next resistance at $66.55.

Resistance level: 64.50, 66.55

Support level: 61.85, 60.10

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