Oil prices stabilized slightly in Asian trade on Tuesday, recouping some losses from the prior week as hopes of a diplomatic thaw between Washington and Beijing helped to cool bearish sentiment. While structural headwinds persist in the form of rising output and soft demand, traders are cautiously repositioning.<\/p>\n
After a sharp drop<\/a> late last week when President Trump threatened a 100 % tariff on Chinese exports, oil prices had slumped to near five-month lows amid fear of demand contraction. A ceasefire in Gaza only added to downward pressure due to an easing of geopolitical risk.<\/p>\n The most recent reversal stems largely from positive sounds coming from Beijing and Washington over a potential trade war. Most notably, U.S. Treasury Secretary Scott Bessent confirmed that President Trump intends to meet President Xi Jinping at the upcoming APEC in South Korea.<\/p>\n At the time of writing, WTI futures<\/a> were trading slightly higher at $59.64 while Brent<\/a> had risen to $63.45.\u00a0<\/p>\n Despite the modest rebound, structural risks remain significant. U.S. oil futures backwardation has cooled<\/a> to a 20-month low, as the premium of nearest contracts over more distant months narrows – a hallmark of softening prompt tightness and growing oversupply fears.<\/p>\n OPEC\u2019s latest monthly report, however, adjusted<\/a> expectations. The organization now sees the 2026 supply shortfall as minor, roughly 50,000 bpd, as its increased output begins to alter the balance in markets.<\/p>\n