WTI rises to near $59.50 due to potential easing of UK-China tensions

• WTI price rises due to growing optimism over a potential easing of tensions between the US and China.
• Trump indicated possible trade agreements with India, Japan, and South Korea while expressing optimism about resolving issues with China.
• Crude prices find support as bullish momentum strengthens following Trump's firm warning of secondary sanctions against countries importing Iranian Oil.

West Texas Intermediate (WTI) crude Oil price extended gains for a second consecutive session, trading near $59.40 per barrel during Asian trading hours on Friday. The rise in Oil prices was supported by growing optimism over a potential easing of tensions between the US and China, the world's two largest Oil consumers.

Market sentiment improved after US President Donald Trump indicated the possibility of upcoming trade agreements with India, Japan, and South Korea, while expressing hope for progress in resolving trade disputes with China. According to Bloomberg, China is considering resuming trade negotiations, acknowledging US outreach but insisting that tariff-related concerns--the core source of friction--must be addressed.

Bullish momentum was further fueled by Trump's stern warning of secondary sanctions on any country purchasing Iranian Oil. Trump declared that all such purchases must cease immediately and warned that any entity continuing to buy Iranian oil or petrochemical products would be subject to US sanctions. "They will not be allowed to do business with the United States of America in any way, shape, or form," Trump posted on Truth Social on Thursday.

These comments came after the US postponed its latest round of nuclear talks with Iran, which had been scheduled for Saturday in Rome. A senior Iranian official told Reuters that a new date would be determined based on the US approach moving forward.

Despite recent gains, WTI remains on track for a weekly loss of about 5%, weighed down by persistent trade uncertainties, weaker demand signals following a US GDP contraction, and China's most severe factory slowdown in over two years.

Adding to the bearish outlook, reports indicate that Saudi Arabia has conveyed to allies and industry stakeholders that it is not inclined to support prices with further production cuts and is prepared to endure a prolonged period of lower prices. This has fueled expectations that OPEC+ may announce an increase in output at its upcoming meeting on May 5.