Oil markets testing higher on trade hopes, production limitations

• Crude markets buoyed by market sentiment hopes.
• OPEC+ production limits having their desired effect, but overall prices remain steeply off of familiar highs.

Oil prices continue to seek higher ground with WTI barrels exploring above the 49.50 barrier on Monday, and a soft decline heading into Tuesday is seeing stiff support from the 48.50 region as US oil prices float near 48.65.

Rising hopes of successful US-China trade talks this week are the primary driver for investors, with broad-market risk appetite pinning higher as traders expect some sort of progress from vice-minister level trade talks today and tomorrow, with the two countries sitting down to begin trade negotiations after promising to hold off on trade war actions back in December. The clock on US President Donald Trump's 90-day tariff hold-off is quickly running out, and markets are pressing for some form of forward progress this week.

Elsewhere, OPEC+'s production levels continue to recede in the face of the conglomerate's agreement to decrease production by 1.2 million barrels per day, and the reduced capacity is helping to alleviate bearish pressure on hammered oil exchanges, lifting prices from their near-term lows in late December, where WTI pinged 42.35 before rebounding steadily.

WTI Technical Levels