U.S./China Tariffs: The United States and China have reached an agreement to temporarily reduce reciprocal tariffs, exceeding expectations as the two largest global economies aim to resolve a harmful trade war that has raised recession concerns and unsettled financial markets. Under the agreement, the U.S. will lower the additional tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on U.S. imports from 125% to 10%. These new measures will be in effect for 90 days, starting today.
U.S. Oil Producers: Top U.S. oilfield service firms are facing a challenging period due to a recent drop in oil prices, leading producers to reduce drilling activity and reconsider budgets. SLB, Halliburton, and Baker Hughes reported cautious customer spending in their first-quarter reports, particularly in North America. Higher OPEC+ output and global tariff wars have driven crude prices down, causing strain on producer budgets. Despite these challenges, the companies are focusing on resilient sectors like LNG infrastructure and data center-driven power demand to navigate the uneven recovery.
U.S. & Iran: Fresh talks between Iranian and U.S. negotiators to resolve disputes over Tehran's nuclear program ended in Oman on Sunday, with further negotiations planned. Despite both sides preferring diplomacy, they remain deeply divided on key issues, particularly uranium enrichment. The fourth round of talks, facilitated by Omani mediators, was described as more serious and straightforward than previous rounds. Tehran insists on continuing uranium enrichment, while Washington demands complete dismantlement of Iran's nuclear facilities. A senior official from President Donald Trump's administration said Sunday, "We are encouraged by today's outcome and look forward to our next meeting, which will happen in the near future."
Market Overview: Oil prices are on the rise this morning following the announcement that the U.S. and China would ease some tariff measures, sparking optimism for an end to their trade war. Additionally, discussions between Iranian and U.S. negotiators to resolve disputes over Tehran's nuclear program concluded in Oman on Sunday, with further talks scheduled, according to officials. A potential U.S.-Iran nuclear agreement could ease worries about reduced global oil supply, which might also influence oil prices.
CLc1 (WTI) Crude Chart (Daily)
The chart above is showing WTI crude futures trade range since the start of the calendar year. WTI is showing strength this morning trading right in the trade channel of $65 a barrel (resistance) and $60 a barrel (support). Crude prices continue to be supported early this week due to a 90-day reduction in tariffs between the two largest economies in the world. Traders will be watching this week to see if oil prices can surge above $65 a barrel and hold there, or if prices will again show weakness with concerns of an oversupplied market and target $60 a barrel once again.
The U.S. and China reached a better-than-expected deal to temporarily reduce tariffs, boosting Wall Street stocks, the U.S. dollar, and crude prices. This agreement aims to end a damaging trade war that has raised fears of recession. Oil prices had fallen to a four-year low in April due to concerns about the trade war's impact on global economic growth and oil demand. Despite this, Saudi Arabia's Aramco expects resilient oil demand, while Iraq's oil exports are projected to decline significantly in May and June. WTI crude settled at $61.95, gaining 93 cents on the day and traded as high as $63.61.
