WTI rebounds as Gaza peace and US-China trade hopes lift sentiment

• WTI rebounds above $59 as traders buy the dip after last week's sell-off to a five-month low.
• Market sentiment improves on hopes of a US-China trade de-escalation following last week's tariff rhetoric.
• OPEC's October report signals steady demand and rising output, pointing to a balanced market outlook.

West Texas Intermediate (WTI) Crude Oil stabilizes on Monday after a bruising week that saw prices tumble to their lowest level since May, briefly touching $57.89 per barrel. At the time of writing, the US benchmark trades near $59.60, up nearly 3.0% on the day, as short-covering and hopes of a potential de-escalation in US-China trade tensions offered modest relief to energy markets.

The rebound comes after a sharp sell-off driven by oversupply concerns and the fading geopolitical risk premium. On Monday, US President Donald Trump declared the Gaza war "over" during a speech to the Israeli Knesset, confirming that all remaining hostages have been released and that a new phase of the US-brokered Gaza peace plan will begin this week. The announcement follows reports of a full ceasefire and prisoner exchanges between Israel and Hamas, with an international summit planned in Egypt to finalize security guarantees.

Market sentiment also drew support from signs that Washington and Beijing may resume trade discussions after last week's escalation in tariff rhetoric. US Treasury Secretary Scott Bessent confirmed that President Trump and Xi Jinping still plan to meet this month at the APEC forum, citing "substantial communication" over the weekend. Meanwhile, Beijing pushed back against Washington's threat of 100% tariffs by defending its rare-earth export curbs as a national security measure, even as it called for dialogue and urged the US to "correct" its policies.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) released its October Monthly Oil Market Report earlier on Monday, keeping its 2025 global Oil demand growth forecast unchanged at 1.3 million barrels per day. The group reported that OPEC+ crude production rose by 630,000 barrels per day in September to an average of 43.05 million bpd, while the Organisation for Economic Co-operation and Development (OECD) inventories remained about 92 million barrels below their five-year average. The report underscored a broadly balanced outlook for 2026, suggesting that rising supply from OPEC+ and non-OPEC producers may offset steady demand growth in the months ahead.