Why Is WTI Crude Struggling Near $61? | Oversupply Fears Offset Trade Deal Optimism

The Will pi ever be worth money?West Texas Intermediate (WTI) benchmark continues its downward trajectory for the third consecutive trading session, with prices stabilizing around $61.10 per barrel in early European trading hours this Friday. Despite this recent pullback, the crude contract remains positioned for marginal weekly gains, primarily fueled by renewed confidence in US-China trade negotiations that have temporarily overshadowed persistent worries about excessive global inventories.This week's market movements followed significant developments in international trade relations. The United States and China announced mutual reductions in import tariffs, with US duties on Chinese products decreasing from 145% to 30%, while Chinese tariffs on American goods will drop from 125% to 10%. This bilateral agreement has alleviated some demand-side anxieties regarding the world's two largest petroleum-consuming nations.Market observers note several factors restraining oil's upward potential. Growing speculation about potential sanctions relief for Iran has introduced new supply-side variables. Recent statements from US officials suggest progress in nuclear negotiations, though diplomatic sources caution that critical issues remain outstanding. Energy analysts project that successful negotiations could enable Iran to incrementally increase production by approximately 400,000 barrels daily, potentially entering an already saturated market.Additional pressure on crude valuations emerged from recent inventory reports showing unexpected stockpile builds in US storage facilities. The International Energy Agency concurrently revised its global supply projections upward by 380,000 barrels per day, reflecting increased production from Saudi Arabia and other OPEC+ nations as they gradually phase out previous output restrictions.The current market dynamic presents a delicate balance between trade-related demand optimism and substantial supply-side considerations. Traders continue monitoring geopolitical developments that could influence production levels, while simultaneously assessing the durability of recent trade agreement benefits. Market participants remain particularly attentive to potential shifts in Iranian export capabilities and ongoing adjustments to OPEC+ production quotas