Oil Prices Drop as Demand Uncertainty Clashes with Supply Risks
WTI crude oil fell on Thursday as markets weighed strong U.S. fuel demand against global recession fears and OPEC+ production shifts.
After a 2% rally on Wednesday driven by a larger-than-expected draw in gasoline inventories, crude struggled to maintain momentum amid growing economic and trade risks.
U.S. gasoline stocks dropped 5.7 million barrels, far exceeding the 1.9-million-barrel draw expected by analysts. However, rising crude inventories and ongoing trade tensions have kept markets cautious, limiting further price gains.
U.S. Demand Strength vs. Economic Headwinds
Crude oil markets are facing a tug-of-war between strong domestic fuel consumption and global economic uncertainty.
Gasoline demand rising: A sharp drop in gasoline inventories suggests increased consumption ahead of peak driving season.
OPEC+ production shift: Kazakhstan led a notable increase in February crude output, raising concerns about OPEC’s ability to enforce quotas.
Trade war risks: President Trump threatened additional tariffs on European goods, rattling investor confidence.
Despite these concerns, demand fundamentals remain solid. According to JP Morgan, global oil consumption reached 102.2 million barrels per day (bpd) in March, surpassing expectations by 60,000 bpd.
WTI Crude Oil Technical Analysis: Key Levels to Watch
WTI crude oil is trading near $67.50, struggling to break resistance at $67.77. The 50-period EMA ($66.98) is acting as dynamic support, offering a potential buying zone if prices pull back.
Immediate resistance: $67.77 – A breakout could push prices to $68.50 and $69.27.
Key support: $66.71 – A break below could send WTI toward $65.67 and $64.69.
50-period EMA: $66.98 – Holding above this level maintains bullish momentum.
A strong breakout above $67.77 would confirm a shift in sentiment, while failure to hold key support levels could signal renewed selling pressure.
Market Outlook: What’s Next for Oil?
Oil traders are closely watching the upcoming EIA crude inventory report for supply trends. A larger-than-expected build in stockpiles could weaken WTI, while a drawdown might reinforce bullish sentiment.
Bullish scenario: Break above $67.77 could send crude to $69.27.
Bearish scenario: Failure to hold $66.71 could lead to a drop toward $64.69.
Geopolitical risks: Ukraine’s drone strikes on Russian energy infrastructure may impact supply expectations.
With demand fundamentals improving but macro risks still looming, WTI crude oil remains at a make-or-break level, requiring a clear breakout or breakdown for its next directional move.
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
SaveAdd 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals