Crude Oil Prices Stagnate Ahead of Trump-Xi Summit, Ending Three-Day Gains

Oil Prices Decline Amid Iran Conflict and US-China Meeting Tensions

Oil prices experienced a decline on Wednesday, May 13, following a surge of 8% over the previous three sessions. The price drop comes as investors closely monitor the fragile ceasefire in the Iran conflict and await the high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping in China.

Brent crude futures slipped 82 cents, or 0.76%, to $106.95 a barrel, while US West Texas Intermediate crude futures dropped 66 cents, or 0.65%, to $101.52 a barrel. Similarly, crude oil prices on the Multi Commodity Exchange (MCX) witnessed a downward movement, falling 0.77% to ₹9,655 per barrel.

Iran Conflict Intensifies Domestic Pressure on Trump

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The Iran conflict continues to weigh heavily on the US economy, with rising crude oil prices pushing fuel costs higher. US President Donald Trump's meeting with Xi Jinping in Beijing on Thursday and Friday is expected to be a crucial test of the fragile ceasefire. Despite assurances from Trump that he does not believe he will require Xi Jinping's support to bring an end to the Iran conflict, prospects for a durable peace agreement continue to fade.

China remains the largest purchaser of Iranian oil despite pressure from the Trump administration. The conflict is expected to intensify domestic pressure on Trump, particularly after fresh US economic data released on Tuesday highlighted how the war is fuelling inflationary concerns. The report revealed that the Iran conflict has begun weighing on the US economy, the world's largest, as rising crude oil prices push fuel costs higher.

The data reinforced expectations that the Federal Reserve may keep interest rates unchanged for an extended period. In April, US consumer prices climbed sharply for the second consecutive month, leading to the steepest annual rise in inflation in nearly three years.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Near-Term Outlook

According to Kaynat Chainwala, AVP - Commodity Research, Kotak Securities, WTI is likely to trade within a broad $80–$115 range, with any credible diplomatic breakthrough or deterioration capable of triggering sharp moves in either direction, until a durable framework emerges.

On the technical outlook, Ponmudi R, CEO of Enrich Money, believes that MCX Crude Oil is trading in the ₹9,400-₹9,500 zone, attempting to stabilise with the ascending trendline continuing to provide underlying support. The near-term bias remains cautiously bullish, with direction contingent on ongoing supply disruption developments in the Strait of Hormuz.