The oil market has come back to life: since the beginning of last week, Brent has gained more than 12%, and this momentum is driven not just by noise but by real events. The key catalyst was the new round of negotiations between the U.S. and China, which resulted in the announcement of a temporary reduction in mutual tariffs. This was a breath of fresh air for market participants tired of chronic trade tensions.

However, the easing of geopolitical pressure on other fronts—between Russia and Ukraine, India and Pakistan—has yet to trigger a strong market reaction. This indicates that players are betting on the trade front, rather than the political one, as the primary driver behind demand recovery.

Further support came from domestic U.S. data. The number of active drilling rigs fell from 483 to 474 over two weeks—a direct signal that producers are unwilling to operate at a loss and that the market is beginning to adapt to previous pricing realities.

Production dropped from 13.46 to 13.37 million barrels per day. Commercial inventories have also moved counter-seasonally, down 2 million and 2.7 million barrels over the past two weeks. These are more than just numbers; they're evidence of resilient demand amid economic uncertainty.

Gas Rally

Natural gas hasn't been left out of the rally. After slumping in the spring, Henry Hub futures broke above the $3.70 per MMBtu level, closing in on the May high of $3.80. A decline in continental U.S. production from 105.8 to 103.7 billion cubic feet per day has supported the market.

Despite a temporary dip in LNG exports to 15.1 Bcf/d due to maintenance at key terminals, the broader outlook remains moderately bullish. Late May temperature forecasts could also boost demand for cooling, albeit modestly.

Technical Outlook for Oil and Gas

Brent's key resistance zone is at $67—formerly a support level lost in April. A breakout and close above this level would open the path toward $71, potentially signaling a complete trend reversal.

Similarly, for WTI, the key mark is $64, followed by $68. Only a firm close above these levels would confirm a reversal and the end of the corrective phase, with more than 20% growth from May's lows—technically marking the start of a bull market.

Brent's support remains around $62.5, and WTI's at $59. A drop below these could trigger a pullback to April lows.

Natural gas shows similar dynamics. Resistance is at $3.80, with the next target at $4.20. Support lies at $3.50 and $3.35. The RSI technical indicator is nearing overbought territory but does not yet signal a reversal, as long as the price stays above $3.70.

Conclusion

The local momentum is strong, but a confirmed trend reversal requires more conviction, both technically and in the news flow. Natural gas cautiously tests the upside amid reduced supply and light seasonal demand. Bullish bets remain in place, but a confirmed bull trend scenario will require validation within the next one to two weeks.