Oil Prices Rebound 3% After Multi-Year Lows – Can WTI Hold Above $66?
Crude oil prices are showing signs of recovery after a dramatic four-session sell-off that pushed Brent crude down 6.5% and WTI crude 5.8% lower, marking their lowest levels since December 2021 and May 2023, respectively.
WTI crude oil is currently trading at $66.70, struggling to maintain bullish momentum after bouncing off key support at $66.14.
The price collapse was triggered by fresh U.S. tariffs on Canadian and Mexican energy imports, along with OPEC+ raising production quotas for the first time since 2022. However, optimism surrounding a potential U.S. tariff exemption on Canadian crude has provided a temporary lift to prices.
Crude inventories rose by 3.6 million barrels last week, far exceeding expectations of a 341,000-barrel increase, as reported by the Energy Information Administration (EIA).
Meanwhile, gasoline and distillate stockpiles fell, signaling strong export demand.
Analysts remain cautious, noting that recovery momentum is fragile due to ongoing supply-demand imbalances.
Market Sentiment Weighs as Tariffs and OPEC+ Decisions Take Effect
The bearish sentiment in the crude oil market is largely driven by President Trump’s new tariff policies, which have disrupted trade flows. The U.S. imposed a 25% tariff on Canadian and Mexican imports, raising concerns over reduced global energy demand. However, Washington has signaled it may exempt automakers from these tariffs, a move that has temporarily lifted market sentiment.
Additionally, OPEC+’s recent decision to raise output quotas has reinforced oversupply fears, putting further pressure on prices. Analysts believe that unless demand significantly rebounds, crude oil may remain under pressure for the foreseeable future.
Another sign of weakening U.S. demand is the drop in waterborne crude oil imports, which fell to a four-year low in February, driven by lower Canadian exports. Refinery maintenance in the Gulf Coast region has also led to reduced processing capacity, further weighing on crude demand.
Trump’s trade measures continue to impact global energy markets
OPEC+ supply increases are adding to oversupply concerns
Refinery maintenance in the U.S. has reduced demand for imported crude
Technical Outlook: WTI Crude Faces Key Resistance at $68.88
WTI crude oil remains firmly in a downtrend, with the 50-day EMA at $68.88 acting as resistance. As long as the price stays below this level, sellers will likely remain in control.
If WTI breaks below $66.14, the next support levels stand at $65.22 and $64.40. A stronger decline could push prices toward $63.62, marking a further bearish extension. However, if buyers step in, WTI could retest resistance at $68.07, with further upside targets at $69.14 and $70.56 if momentum builds.
Bearish bias remains unless WTI reclaims $68.88
Break below $66.14 could trigger a slide to $64.40
Upside potential exists if WTI crosses above $68.07 resistance
As global markets await key economic data and further U.S. trade policy updates, crude oil traders should closely monitor price action around these technical levels. A breakout above resistance could indicate a trend reversal, while failure to hold above key support may accelerate selling pressure.
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