Crude oil prices saw little movement on Tuesday, with July contracts for West Texas Intermediate (WTI) edging down to $61.97, while Brent futures for July hovered around $65.35. The market remains in a state of indecision, balancing between international diplomatic efforts, robust demand across Asia, and a somewhat unclear economic outlook from both China and the United States.

A major source of uncertainty lies in the ongoing US-Iran nuclear negotiations. Tehran’s Deputy Foreign Minister warned that talks could stall should Washington insist on fully ceasing uranium enrichment, one of the key sticking points in reviving the 2015 nuclear deal.

A successful deal could unleash an estimated 300,000–400,000 barrels per day of Iranian supply, according to StoneX.

Elsewhere, physical demand in Asia remains strong. Refineries across the region ramp up post-maintenance production, supported by favourable refining margins. Singapore’s refining margins, a key regional gauge, averaged over $6 per barrel in May, up sharply from April’s $4.40. This reflects healthy profit levels likely to sustain near-term buying interest.

However, upward momentum is limited, as traders weigh broader macroeconomic concerns. The recent downgrade of US sovereign debt by Moody’s has added to existing worries about global growth prospects, particularly for the world’s top oil consumer. Alongside disappointing industrial production and retail sales figures from China, questions are mounting over the resilience of the global oil demand recovery.

BMI’s forecast further reinforces this caution, with analysts now expecting a 0.3% year-on-year decline in China’s 2025 oil consumption. “Even if China adopts stimulus measures, it may take time to have a positive impact on oil demand,” they warned in a note.

Energy markets are also keeping a close eye on any potential developments in Russia-Ukraine peace talks. According to ING, any diplomatic breakthrough could result in sanctions being eased, potentially allowing Russian oil back onto international markets, thereby further pressuring supply dynamics.

Technical Analysis

WTI crude is currently rangebound, consolidating after rebounding from the support level at $60.983 and touching a recent high of $62.683. Price action on the 15-minute chart has flattened out, with candles compressing just above the 30-period moving average. The short-term moving averages (5 and 10) are converging, signalling a loss of directional momentum.

The MACD histogram shows waning bullish momentum, with a potential crossover developing near the zero line—suggesting buyers may be losing steam. However, price remains above the mid-range support zone near $61.80, hinting at stability for now. Resistance stands at $62.30–62.70, while a break below $61.80 could expose the lower bound near $61.07.

If bulls can reclaim and close above $62.30, we may see renewed upside attempts. Otherwise, the bias remains neutral to slightly bearish intraday.

Cautious Forecast

With prices oscillating between $60.98 and $62.68, WTI remains firmly within a consolidation zone. A push towards recent highs seems unlikely without clearer signals from either diplomatic developments or key economic data. Traders are encouraged to stay nimble, keeping a close eye on Washington and Beijing, as well as any tangible progress on the geopolitical front.

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