By Ion Jauregui – Analyst at ActivTrades
Oil prices continue to show strength after gaining more than 4% last week, despite a slight correction during Monday’s Asian trading session. Brent futures are hovering around $66.43 per barrel, while WTI is trading at $64.52. This price stability reflects the market's anticipation ahead of key trade talks between the United States and China taking place today in London.
Negotiation Context
U.S. officials Scott Bessent (Treasury) and Howard Lutnick (Commerce) will meet with Chinese Vice Premier He Lifeng to address sensitive topics such as tariffs, export restrictions, and access to strategic technologies. The uncertainty generated by these ongoing trade tensions has been a major factor pressuring crude prices in recent months, particularly affecting European economies most exposed to foreign trade, such as Germany, Italy, and the Netherlands.
China’s Economic Data
At the same time, European investors are closely watching China’s upcoming economic data. The inflation and trade figures for May, scheduled for release today, may provide a clear signal of the strength of domestic demand in the world’s second-largest economy. A weak China typically translates into lower demand for raw materials, directly impacting oil prices and, consequently, energy-driven inflation across Europe.
OPEC+ Production
Additionally, pressure on oil prices has been amplified by the steady increase in production from OPEC+ so far in 2025. This factor has kept expectations for short-term price rallies in check, especially if Chinese data fails to meet forecasts.
Relevance for Europe
For Europe, these developments are far from being external affairs. The continent's economy—highly dependent on global trade and energy imports—remains particularly sensitive to the outcome of the negotiations. An improvement in trade relations between the two superpowers could ease pressure on global supply chains and, in turn, boost both industrial and energy demand across Europe.
Brent Technical Analysis
As of April 3, Brent crude broke downward out of a long-standing range between $94.5 and $70.45, rebounding twice off the $58.16 lows during April and May. Since then, the price of oil has been steadily recovering, approaching the $66 level. If current pricing drives the asset back into the previous range, we could see a breakout through the lower band and a potential recovery toward the former control zone around $72.5, which coincides with the 61.8% Fibonacci retracement level. The current fluctuation zone spans roughly 25%, leaving considerable room for value recovery. The RSI currently indicates overbought conditions at 59.02%, correcting downward throughout today’s Asian session after peaking at 71.55% on Friday.
Conclusion
In summary, Europe is strategically focused on the London negotiations. The outcome could mark a turning point in global commodity flows and lay the groundwork for greater energy market stability across the continent in the second half of the year.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
Oil prices continue to show strength after gaining more than 4% last week, despite a slight correction during Monday’s Asian trading session. Brent futures are hovering around $66.43 per barrel, while WTI is trading at $64.52. This price stability reflects the market's anticipation ahead of key trade talks between the United States and China taking place today in London.
Negotiation Context
U.S. officials Scott Bessent (Treasury) and Howard Lutnick (Commerce) will meet with Chinese Vice Premier He Lifeng to address sensitive topics such as tariffs, export restrictions, and access to strategic technologies. The uncertainty generated by these ongoing trade tensions has been a major factor pressuring crude prices in recent months, particularly affecting European economies most exposed to foreign trade, such as Germany, Italy, and the Netherlands.
China’s Economic Data
At the same time, European investors are closely watching China’s upcoming economic data. The inflation and trade figures for May, scheduled for release today, may provide a clear signal of the strength of domestic demand in the world’s second-largest economy. A weak China typically translates into lower demand for raw materials, directly impacting oil prices and, consequently, energy-driven inflation across Europe.
OPEC+ Production
Additionally, pressure on oil prices has been amplified by the steady increase in production from OPEC+ so far in 2025. This factor has kept expectations for short-term price rallies in check, especially if Chinese data fails to meet forecasts.
Relevance for Europe
For Europe, these developments are far from being external affairs. The continent's economy—highly dependent on global trade and energy imports—remains particularly sensitive to the outcome of the negotiations. An improvement in trade relations between the two superpowers could ease pressure on global supply chains and, in turn, boost both industrial and energy demand across Europe.
Brent Technical Analysis
As of April 3, Brent crude broke downward out of a long-standing range between $94.5 and $70.45, rebounding twice off the $58.16 lows during April and May. Since then, the price of oil has been steadily recovering, approaching the $66 level. If current pricing drives the asset back into the previous range, we could see a breakout through the lower band and a potential recovery toward the former control zone around $72.5, which coincides with the 61.8% Fibonacci retracement level. The current fluctuation zone spans roughly 25%, leaving considerable room for value recovery. The RSI currently indicates overbought conditions at 59.02%, correcting downward throughout today’s Asian session after peaking at 71.55% on Friday.
Conclusion
In summary, Europe is strategically focused on the London negotiations. The outcome could mark a turning point in global commodity flows and lay the groundwork for greater energy market stability across the continent in the second half of the year.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.