Oil Holds Near $69 as New U.S. Tariffs Threaten Global Supply, Demand Balance
Oil prices remained relatively flat on Tuesday as traders assessed the potential impact of the U.S. government’s newly imposed 25% tariff on nations importing Venezuelan crude.
The move, announced by President Trump, directly targets countries such as China, Venezuela’s largest buyer, and adds fresh complexity to already strained global trade dynamics.
While the intent is to tighten pressure on Venezuela’s energy sector, the policy raises fresh concerns over global oil demand, especially with broader economic slowdowns on the horizon. “Trump’s tariff decisions, especially the lack of clarity and sudden shifts, make it risky for investors to build large positions,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
In a further twist, the administration granted Chevron an extension until May 27 to wind down its operations in Venezuela. Analysts at ANZ estimate that ending Chevron’s presence could shave 200,000 barrels per day from Venezuela’s output—yet another potential supply disruption in a tightening market.
OPEC+ Eyes Supply Stability
On the supply side, OPEC+ appears committed to modest output increases in May, aiming to balance stable prices with internal production discipline. According to Reuters, the group plans to continue its coordinated strategy, while compelling overproducing members to scale back excess pumping.
The oil market is caught between two forces:
Rising geopolitical tension restricting supply (e.g., Venezuela, Iran)
Global trade pressure that threatens to reduce demand
As a result, crude markets are range-bound. ANZ’s outlook expects WTI to remain around $70 for much of the year, barring unexpected demand shocks or production cuts.
WTI Crude Oil Technical Outlook: Cautious Optimism
WTI crude is currently trading at $68.92, holding just below a key resistance level at $69.30. The commodity has recently broken above a descending trendline, suggesting a shift in short-term sentiment. Support is forming at $68.59 and the 50-day EMA at $67.82, while further downside is anchored by $67.40 and $66.62.
Price outlook remains cautiously bullish:
Break above $69.30 opens path toward $69.94 and $70.58
Holding above $67.82 maintains upward bias
Failure to clear $69.30 could trigger consolidation
For now, traders remain focused on key economic signals and U.S. policy direction, with any surprise on sanctions or output changes likely to shake the balance.
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