Key Points:
- WTI closes at $70.74; Brent falls to $74.02.
- API data shows 6 million-barrel build in US crude inventories.
Oil prices drifted lower on Wednesday as traders reacted to deepening concerns around global demand following U.S. President Donald Trump’s proposed tariffs on major trade partners. WTI crude futures slipped 0.6% to $70.74, while Brent crude retreated to $74.02 after briefly touching five-week highs at the start of the week.
The chart shows WTI hitting a high of $72.08 before sliding steadily toward $70.66, with price action closing at $70.843. The MACD (12,26,9) has crossed below the signal line, and the histogram is dipping further into negative territory—pointing to weakening bullish momentum. The commodity is now testing key support around $70.50, with the next level seen at $69.77.
Tariffs and Demand Risks
President Trump’s aggressive stance on trade has sparked fresh fears that tariffs on countries like China, Russia, and Germany will reduce global economic output and suppress energy demand. While the scope of the tariffs remains unclear, the threat alone has injected enough uncertainty to drag commodities lower.
That said, supply-side concerns have limited the extent of the pullback. Markets remain alert to cross-border tensions, particularly following Trump’s renewed threats against Iran and Russia, which could curb exports from both countries.
Technical Analysis
This 15-minute chart of Crude Oil (CL-OIL-ECN) shows a strong initial rally, with price surging from 69.55 to a high of 72.08, followed by a gradual but steady decline and consolidation phase. The MACD peaked early and has since turned bearish, reflecting declining momentum. The price is now trading around 70.84, beneath the moving averages (5, 10, 30), suggesting short-term pressure from sellers.
Picture: Oil retreats after failed breakout above $72—sideways grind back in play, as seen on the VT Markets app
Support seems to be forming around 70.50, while 71.30–72.00 now acts as a resistance zone. The narrowing MACD and flattening price action suggest indecision in the market—likely awaiting a fresh catalyst.
Inventory Data Adds Pressure
The latest API inventory data added another layer of bearishness, showing a surprise 6 million-barrel build in U.S. crude stockpiles. Meanwhile, gasoline inventories dropped by 1.6 million barrels, partially offsetting fears of oversupply but highlighting soft demand trends ahead of peak driving season.
Markets now turn their focus to the official EIA inventory data and Thursday’s OPEC+ ministerial meeting, which could determine whether the cartel will move forward with its anticipated output hike beyond April.
Cautious Forecast
If WTI breaks firmly below $70.50, selling pressure could intensify toward the $69.77 support area. However, traders are likely to remain cautious ahead of the OPEC+ decision, with potential upside limited unless clarity on tariffs and geopolitical risks improves.
Short-term bias remains tilted to the downside, with technicals softening and macro headwinds dominating sentiment.
