Crude oil prices saw a sharp uptick on Tuesday, rising more than a dollar per barrel as easing U.S.-China trade tensions and a surprisingly tame U.S. inflation report lifted market sentiment.

Brent crude futures climbed $1.11, or 1.71%, reaching $66.07 per barrel by 14:43 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) rose 95 cents, or 1.53%, to settle at $62.90 per barrel.

The gains followed a robust rally the previous day—both benchmarks had jumped over 4%—as Washington and Beijing agreed to slash tariffs for at least 90 days. The move not only buoyed global equities and the U.S. dollar but also injected new optimism into energy markets.

“We lagged behind other sectors in reacting to the China news yesterday, so today is more of a catch-up,” explained John Kilduff, partner at Again Capital LLC. “Plus, this morning’s inflation data gives the Fed some flexibility to act.”

Fresh figures from the U.S. Labor Department revealed that consumer prices rose just 2.3% in April on an annual basis—the slowest rate in four years. In response, major financial institutions like JPMorgan Chase and Barclays dialed back their recession forecasts for the U.S., citing the cooling inflation trend.

Lower inflation reduces pressure on the Federal Reserve to hike interest rates, potentially keeping borrowing costs low and sustaining consumer demand—both factors that support oil prices.

On the supply side, OPEC+ is preparing to ramp up oil exports in May and June, which analysts say could cap further gains in crude prices. The cartel has already boosted production more than expected since April, with May output projected to climb by 411,000 barrels per day.

Sources also told Reuters that Saudi Arabia will maintain steady crude exports to China in June after delivering record-high volumes in May—its strongest showing in over a year. The Kingdom remains China’s second-largest oil supplier, trailing only Russia.

Despite concerns over weakening global crude demand, refined fuel markets continue to show resilience.

"While the outlook for crude is softening, refined product demand remains a bright spot," JPMorgan analysts noted in a report. They added that international crude prices have slipped 22% since peaking on January 15, but refining margins and product prices have held firm.

With refining capacity shrinking in key markets like the U.S. and Europe, tighter gasoline and diesel supply chains are increasing reliance on imports, making prices more vulnerable to sudden outages or maintenance disruptions.