Oil Prices Sink Below $68 as OPEC+ Output Hike Fuels Bearish Trend
WTI crude oil slid to $67.84 on Tuesday as investors reacted to OPEC+’s decision to increase oil production by 138,000 barrels per day (bpd) in April—the group’s first output hike since 2022.
The move, aimed at gradually rolling back previous supply cuts, has raised fears of a potential market oversupply, placing additional pressure on oil prices.
Darren Lim, a commodities strategist at Phillip Nova, noted that “OPEC+’s production boost, coupled with the impact of U.S. tariffs, is driving the current downtrend.”
With the global oil market already adjusting to lower-than-expected demand growth, the additional barrels could exacerbate the bearish sentiment.
Tariffs and Trade War Fears Hit Energy Demand
The new U.S. trade tariffs—including a 25% levy on Canadian and Mexican imports and a 10% hike on Chinese goods—fueled fresh uncertainty across global markets.
China swiftly retaliated, imposing 10%-15% tariffs on key U.S. agricultural and food exports while restricting 25 American companies from engaging in trade and investment activities.
Market analysts warn that escalating trade tensions could curb industrial activity and energy consumption, directly impacting oil demand. “Market participants are struggling to gauge the impact of the flood of energy-related policy announcements made by the U.S. administration this month,” noted BMI analysts in a recent report.
WTI Crude Faces Key Technical Levels
WTI crude is currently struggling below $68.49, a key support level that was breached earlier this week. The 50-period EMA at $69.39 remains a crucial resistance zone, reinforcing the bearish outlook.
Immediate resistance: $69.36 and $70.52—oil must clear these levels to regain bullish momentum.
Immediate support: $67.04, with further downside risks at $66.23 and $65.49.
A rejection at $69.39 could trigger further declines, while a breakout above $70.52 might signal a trend reversal.
With ongoing supply concerns, trade policy shifts, and geopolitical tensions, WTI remains vulnerable to further downside unless demand indicators improve or OPEC+ revises its production strategy.
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