WTI advances to one-week high, closer to mid-$59.00s as traders eye US-China trade talks

• WTI builds on this week's bounce from a nearly one-month low amid US-China trade talks optimism.
• The fundamental backdrop warrants some caution before positioning for any further appreciation.
• Traders might also opt to wait on the sidelines ahead of the crucial FOMC policy decision later today.

West Texas Intermediate (WTI) US Crude Oil prices gain some follow-through positive traction on Wednesday and climb to a one-week high during the Asian session. The commodity currently trades around the $59.40 region, up over 1% for the day, and looks to build on this week's bounce from the vicinity of the $55.00 psychological mark, or a nearly one-month low.

News that the US and China - the world's two largest economies - will start trade talks this weekend helps improve sentiment and ease demand concerns. This, in turn, provides some relief in the oil market, which, along with expectations for tighter US supplies, acts as a tailwind for the black liquid. In fact, some US energy firms announced rig reductions on the back of lower Crude Oil prices.

The commodity draws additional support from persistent geopolitical risks stemming from the protracted Russia-Ukraine war and fresh conflicts in the Middle East. Apart from this, hopes for improving fuel demand in China underpin Crude Oil prices, though the OPEC+ decision to speed up output increases continues to stoke fears of oversupply and might cap gains for the commodity.

Meanwhile, some repositioning trade ahead of the highly-anticipated FOMC policy decision assists the US Dollar (USD) to gain some positive traction following a three-day losing streak. This might further contribute to keeping a lid on Crude Oil prices. Traders now look forward to the government data on US stockpiles. The focus, however, will remain on the outcome of a two-day FOMC meeting.