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WTI Rallies After Trump Says China Will Buy US Oil
Traders' Opinions
Summary:
WTI crude surged above $100 after Trump said China agreed to buy US oil, while ongoing Strait of Hormuz tensions continued to fuel supply concerns and support bullish momentum in energy markets.
Buy
TradingWTI
EXP
99.216
Entry Price
112.000
TP
96.000
SL
100.866 +3.120 +3.19%
0
Point
Flat
96.000
SL
CLOSING
99.216
Entry Price
112.000
TP
West Texas Intermediate crude extended its rally on Friday, with US benchmark futures climbing above the $100 mark and reaching fresh weekly highs after US President Donald Trump stated that China had agreed to purchase American Oil following talks with Chinese President Xi Jinping.
The bullish move came despite the absence of any concrete agreement regarding the reopening of the Strait of Hormuz, one of the world’s most critical energy shipping routes. Trump said China was committed to helping stabilize the situation, though Chinese officials have yet to confirm any formal Oil purchasing arrangement or detailed plan to restore full access through the waterway.
In my view, the market reaction highlights growing fears that disruptions in the Strait of Hormuz could persist longer than expected, tightening global supply conditions and keeping upward pressure on energy prices. Roughly 20% of global Oil flows pass through the strategic route, making any uncertainty in the region highly supportive for crude markets.
The Trump-Xi summit concluded with limited tangible outcomes, but traders focused on the broader implications for global energy demand and supply security. Expectations of stronger Chinese demand for US crude, combined with ongoing Middle East tensions, continue to reinforce bullish sentiment across the Oil market.
Higher crude prices are also adding to global inflation concerns, strengthening expectations that major central banks, including the Federal Reserve, may keep interest rates elevated for longer.
Technical Analysis
From a technical perspective, West Texas Intermediate (WTI) crude oil remains positioned within a developing bullish recovery structure on the 4-hour chart. Price action has continued to print higher lows following the sharp rebound from the May swing low near the $88.50 region, indicating that buyers are gradually regaining control of the broader short-term trend. The recent push back toward the psychologically important $100.00 level confirms improving upside momentum, although price is now confronting a significant resistance cluster between $99.00 and $100.50.
The market is currently testing a major horizontal supply zone around $99.00–$100.00, which has repeatedly acted as both resistance and short-term equilibrium throughout recent trading sessions. This region is critical because a sustained breakout above it would confirm continuation of the current bullish structure and likely trigger acceleration toward the next resistance band near $104.50–$105.00. A successful breach of that level would further strengthen bullish sentiment and expose higher upside objectives around $107.50–$108.00, with the broader projected move on the chart suggesting potential extension toward the $112.00 area over the coming sessions.
Despite the constructive recovery, the market remains vulnerable to near-term consolidation while below the $100.50 resistance ceiling. The recent rejection wick from the current highs signals that sellers are still defending this zone aggressively. However, the inability of bears to force price back below the rising short-term support structure suggests underlying buying pressure remains intact.
On the downside, immediate support is now established around the $98.50–$98.00 area, which aligns with the recent breakout base and prior consolidation region. As long as price remains above this zone, the bullish recovery structure remains valid. A deeper retracement below $98.00 would likely shift focus toward the stronger support band near $96.00, where buyers previously stepped in aggressively. That area represents the key structural support maintaining the current bullish outlook.
A decisive breakdown beneath the $96.00 region would significantly weaken momentum and invalidate the current recovery pattern. In such a scenario, downside pressure could intensify toward the $91.50–$92.00 support zone, which served as a major accumulation area during the earlier corrective phase. A sustained move below that level would expose the broader bearish continuation risk toward the $88.00 handle.
Momentum conditions continue to favor the bulls overall. Although short-term momentum appears slightly stretched after the recent advance, price action continues to respect higher-low formations rather than showing signs of structural exhaustion. The Relative Strength Index (RSI) is likely hovering in moderately bullish territory, suggesting momentum remains positive without yet reaching extreme overbought conditions. Meanwhile, the Moving Average Convergence Divergence (MACD) likely remains above the zero line, indicating bullish momentum is still active, though near-term consolidation may occur before the next impulsive move higher.
TRADE RECOMMENDATION
BUY WTI CRUDE OIL
ENTRY PRICE: 99.20
STOP LOSS: 96.00
TAKE PROFIT: 112.00
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