WTI extends winning streak on US-China trade truce

• WTI jumps to near $62.00 as the US and China agreed to a 90-day pause in the tariff war.
• Traders pare Fed dovish bets for the July meeting after the US-China trade truce.
• Ukraine Zelenskyy insisted on meeting with Russian President Putin in Turkey this week.

West Texas Intermediate (WTI), futures on NYMEX, extends its winning streak for the fourth trading session on Tuesday. The Oil price climbs to near $62.00 as the 90-day agreement between the United States (US) and China to reduce tariffs substantially by 115% has boosted its demand outlook.

On Monday, the US and China agreed to lower import duties to 10% and 30%, respectively, aiming to avert the trade war that led market experts to downgrade the global economic outlook. Signs of improving US-China trade relations have strengthened the Oil price, given that Beijing is the largest importer of energy in the world.

Meanwhile, the temporary truce between the US and China has diminished market expectations of interest rate cuts by the Federal Reserve (Fed) in the July meeting. Such a scenario could limit the upside in the Oil price. On Monday, Fed officials cheered the US-China deal and stated that the impact of tariffs will be lower than what they had anticipated earlier, but didn't rule out fears of an increase in inflation.

According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the July meeting has dropped to 38.6% from 78% recorded a week ago.

The next trigger for the Oil price will be a meeting between Russian leader Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, if Putin agrees to it. Zelenskyy has insisted on meeting with Putin in Turkey on Thursday to discuss the war in Ukraine. Positive outcomes from the war talks would be favorable for the Oil price.