Oil Prices Are Low-Key Struggling—Will WTI Finally Break Out

U.S. President Donald Trump has escalated trade concerns with his latest threat of 25% tariffs on steel and aluminum imports—a move that could impact industrial demand for energy. While markets initially shrugged off these tariff headlines, China’s retaliatory duties on U.S. exports, set to take effect this week, add another layer of uncertainty. Additionally, traders are closely monitoring U.S. waivers on crude and LNG exports to China, which could significantly influence energy prices.

Sanctions on Russia and Iran Add to Supply Concerns

Beyond trade tensions, sanctions imposed on Russia’s oil sector on January 10 have disrupted supplies to key customers, including China and India. Meanwhile, the U.S. Treasury has tightened sanctions on Iran, targeting oil shipments to China. These restrictions are adding to fears of supply constraints, offsetting downward pressure from Trump’s push to lower energy prices.

Analysts at Citi suggest that while sanctions on Iran and Russia pose upside risks for crude, Trump’s policies are likely to keep oil prices in check over the long term. Citi forecasts Brent crude to average $60 to $65 per barrel in the second half of 2025, citing a bearish outlook driven by Trump’s persistent efforts to bring down energy prices.

Technical Outlook: Can WTI Break the Downtrend?

On the 4-hour chart, WTI crude oil remains within a well-defined descending channel, with the 50-day EMA at $72.23 acting as a strong resistance level. Despite the broader downtrend, oil has found support near $70.42, preventing further losses for now.

• Immediate resistance stands at $71.59, followed by $72.91 and $73.83. A breakout above these levels could trigger a short-term recovery.

• On the downside, key support remains at $70.42, with further downside potential toward $69.49 if selling pressure increases.

• A failure to clear resistance at $72.23 may see WTI crude struggling to gain momentum, keeping the bearish outlook intact.

Final Thoughts

WTI crude oil is at a critical juncture, with global trade policies, supply risks, and technical levels shaping its next move. If buyers push prices above $72.91, a reversal could be in play. However, failure to hold $71 could lead to another test of key support levels, reinforcing the current downtrend.