Oil Price Forecast: WTI crude extends upside above $64.00 on improved US-China relations

• US-China trade talks continue in London, lifting WTI prices above $64.00 on improved demand outlook.
• The US NFIB Index for May shows improved Business Optimism, supportive of higher Oil prices on higher energy need expectations.
• Investors look ahead to the US API report scheduled for Tuesday for signs of changes to weekly Oil stockpiles.

West Texas Intermediate (WTI) crude Oil price is trading higher on Tuesday, extending its upward move for the fourth consecutive day, and supported by ongoing optimism around the second day of US-China trade talks in London. 

As the world's two largest economies, any progress in their trade relationship has a direct impact on global Oil price, influencing demand expectations, supply chain dynamics, and overall market sentiment. 

Following positive remarks on Monday from US President Donald Trump, who affirmed that he is receiving "good reports" from the meeting, US Commerce Secretary Howard Lutnick told reporters that trade talks with China are progressing well. He added that he expects the talks to continue throughout the day, according to Reuters.

With reports suggesting both sides are working toward improved trade cooperation, market confidence has lifted, pushing WTI above the $64.00 mark at the time of writing, as traders continue to monitor developments for further direction.

US NFIB shows business confidence improving in May, providing an additional boost to Oil price

Adding to the positive tone, the National Federation of Independent Business (NFIB) Business Optimism Index for May has indicated an improvement in business confidence among small businesses on Tuesday, providing an additional boost for the Oil price. 

The index recorded a value of 98.8 in May, surpassing the consensus estimate of 95.9 and showing an increase from April's reading of 95.8. 

US API data is expected to show weekly stockpiles increasing by 0.7 million barells

The American Petroleum Institute (API) will release its Weekly Statistics Bulletin at 20:30 GMT, which is expected to show a 0.7 million barrel increase in stockpiles, following last week's 3.3 million barrel drawdown.

This data offers insights into refinery operations and production in the United States, reflecting the state of US stockpiles. 

If the weekly report misses forecasts and shows that stockpiles are decreasing, reduced supply could drive the Oil price higher. In contrast, an increase in stockpiles could have a negative effect on WTI.

WTI Oil price extends gains above $64.00 

WTI Oil is extending gains on Tuesday, with prices trading above $64.00 at the time of writing.

For the upside move, the $65.00 psychological level remains a key resistance barrier, which could open the door for the 100-day Simple Moving Average (SMA) just below $66.00.

With the upside gaining traction over recent days, the Relative Strength Index (RSI) indicator stands at 61 in the daily chart, showing strong upward momentum. Toward the downside, a move below $64.00 could see WTI Oil bears step in, with the 20-day SMA providing support at $62.00.

WTI Oil daily chart