Oil Prices Drop 10% from 2025 Highs: Will WTI Hold Above $70 Support?

Oil prices edged slightly higher in Asian trading on Thursday, recovering modestly after Saudi Aramco’s sharp price hike for March deliveries.

However, this uptick was minimal compared to Wednesday’s 2% slump, marking the steepest decline in Brent crude in nearly three months. The drop followed a significant build in U.S. crude and gasoline inventories, signaling weaker demand, and heightened market anxiety over new U.S.-China trade tariffs, including those targeting energy products.

Since reaching its 2025 peak on January 15, WTI Crude Oil has tumbled about 10%, underscoring the market’s sensitivity to geopolitical developments and shifting economic policies under the new U.S. administration. Analysts expect volatility to persist as traders navigate the implications of President Donald Trump’s tariff measures and their potential ripple effects on global energy demand.

Geopolitical Tensions and Market Volatility

The latest round of U.S. sanctions against Russia’s oil sector, targeting “shadow vessels” used to circumvent trade restrictions, has added another layer of complexity. Meanwhile, Beijing’s retaliatory tariffs on U.S. oil, liquefied natural gas (LNG), and coal, announced Tuesday, have introduced fresh uncertainties. Although China’s energy imports from the U.S. are modest, these measures still contribute to bearish market sentiment.

“We can expect significant volatility in pricing over the coming weeks and months as markets scramble to weigh the impact of Trump’s new policy positions, not least regarding tariff measures,” noted analysts from BMI Research.

Saudi Aramco’s price hike has provided some support, encouraging short-covering by traders near the critical $70-$68 support zone. However, market fundamentals remain fragile, with bearish pressures outweighing bullish catalysts.

WTI Crude Oil Technical Analysis: Key Levels to Watch

WTI Crude Oil continues to trade within a descending channel, with the 50-period Exponential Moving Average (EMA) at $72.31 acting as dynamic resistance. A breakout above this level could signal a shift in sentiment, targeting $73.31 and beyond. Conversely, failure to hold above $70.81 may trigger further declines toward $68.47.

• Resistance Levels: $71.96 (immediate), $73.31, $74.72

• Support Levels: $70.81 (immediate), $69.49, $68.47

Key Insights:

• WTI Crude has fallen 10% from 2025 highs, currently trading at $71.15.

• Geopolitical tensions, U.S.-China tariffs, and supply data are key drivers.

• Technical outlook remains bearish unless WTI breaks above $72.31 (50 EMA).

As markets digest ongoing geopolitical developments and economic data, oil prices are likely to remain volatile.