Oil Prices Slide as OPEC+ Hikes Output, U.S. Tariffs Raise Growth Fears
WTI crude oil continued its decline for the third consecutive session on Wednesday, as a combination of OPEC+’s decision to raise production in April and heightened trade tensions weighed on investor sentiment.
With U.S. tariffs on Canadian, Mexican, and Chinese imports coming into effect, concerns over slower economic growth and weakened fuel demand intensified.
In the previous session, oil contracts closed near multi-month lows, reflecting an increasingly bearish market outlook.
“Unfavorable supply-demand dynamics are creating a double whammy, as tariff uncertainties pose downside risks to global growth, and in turn, oil demand,” noted Yeap Jun Rong, market strategist at IG.
Meanwhile, OPEC+ confirmed plans to increase oil output for the first time since 2022, announcing a modest 138,000 barrel-per-day (bpd) hike in April as part of its phased strategy to unwind earlier cuts totaling 6 million bpd—nearly 6% of global demand.
Tariffs Threaten Oil Demand, Spark Economic Worries
The Trump administration’s new trade measures have fueled economic uncertainty, particularly in the U.S., the world’s largest oil consumer. Key tariff adjustments include:
25% tariffs on all imports from Mexico
10% tariffs on Canadian energy exports
Doubling of Chinese import duties to 20%
25% tariffs on all other Canadian imports
Economists fear that rising trade barriers could slow growth, reduce jobs, and push inflation higher, ultimately impacting fuel consumption.
Adding to supply-side concerns, the U.S. ended a special license for Chevron (CVX) to operate in Venezuela, putting an estimated 200,000 bpd of crude supply at risk.
“This will leave U.S. refiners scrambling for alternative heavy crude sources, just as Canada and Mexico face tariff restrictions,” ING commodity strategists wrote in a note.
Meanwhile, U.S. crude stockpiles fell by 1.46 million barrels for the week ending February 28, according to the American Petroleum Institute (API). Traders now await official government inventory data for further clarity on supply dynamics.
WTI Crude Oil Technical Analysis: Key Levels
WTI crude oil is currently trading at $67.67, facing resistance near the descending trendline and the 50-day EMA at $69.42. The failure to break above these levels suggests continued bearish momentum.
Immediate resistance: $68.49 (previous support now turned resistance)
Stronger resistance: $69.36 and $70.52 (trendline breakout needed for bullish reversal)
Support levels: $67.04, with a deeper downside risk toward $66.23 and $65.49
Market sentiment remains fragile, driven by demand concerns and geopolitical risks. A rejection at $68.49 or a failure to clear the trendline resistance could signal further downside. However, a break above $70.52 may indicate the start of a broader recovery.
For now, WTI crude remains bearish unless it reclaims $70.52 with strong buying pressure.
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