WTI futures recovered nearly 2% after earlier slipping to session lows, as traders grappled with renewed threats of U.S. tariffs on Chinese goods. Market participants pointed to a surprise weekly inventory draw of 2.1 million barrels reported by the EIA, which provided support even as consumption forecasts for the second quarter were revised lower by 150,000 barrels per day. Heightened volatility was reflected in a 10% jump in average daily range over the past three trading days.

Commitments of Traders data showed managed money accounts increased their net short WTI positions by 12% week-on-week, rising from 93,000 contracts to 104,000 contracts. This build in bearish bets coincided with a decline in open interest for crude options, down by 5%, suggesting that some hedgers may have closed calls in response to geopolitical uncertainties. Long positions fell by 8% during the same period, indicating a broad pullback in bullish exposure.

Technical analysts highlight the 58.30 level as a critical floor, noting that a breach below this point would expose WTI to further selling pressure towards 55.00. Conversely, a successful hold above 58.30 could trigger short-covering and drive prices back above 61.00 in the near term. Momentum indicators, including the 14-day RSI rising from oversold territory, support the case for a surprise rebound if tariff talks show signs of de-escalation.