WTI Crude Tops $69.67 on 4.6M Barrel Drop, Tariff Fears Cap Rally
WTI crude oil extended its rally this week, driven by mounting supply-side concerns.
Prices climbed to a three-week high of $69.67 after the U.S. administration intensified efforts to curtail oil exports from Venezuela and Iran, adding fresh geopolitical risk to an already tight market.
In a move signaling broad sanctions enforcement, President Trump signed an executive order enabling 25% blanket tariffs on imports from any nation trading Venezuelan crude. The executive action, backed by the 1977 International Emergency Economic Powers Act, could severely restrict Venezuela’s ability to export its most critical asset.
Venezuela’s largest oil customer—China—paused purchases this week as traders awaited further guidance from Beijing. Meanwhile, the U.S. also cracked down on Iranian oil flows, sanctioning firms like Shouguang Luqing Petrochemical, an independent Chinese refinery, and the vessels that supply it.
Adding fuel to the bullish fire, the American Petroleum Institute reported a 4.6 million barrel decline in U.S. crude inventories last week, far exceeding the 1 million barrel draw forecast by analysts surveyed by Reuters. The data points to firm demand within the world’s largest economy.
Market Cautious as Tariff Risks Cloud Outlook
Despite the recent upswing, analysts remain cautious about oil’s ability to sustain its momentum. Priyanka Sachdeva, senior market analyst at Phillip Nova, warned that the rally could be short-lived.
“The bullish bias is clear for now, but Trump’s sweeping tariffs risk triggering a broader economic slowdown that could cap oil prices,” she noted.
Further tempering upside momentum, the U.S. has reportedly reached temporary agreements with Ukraine and Russia to halt energy-related attacks at sea. Washington also signaled willingness to support the lifting of certain sanctions against Moscow as part of the deal.
Key factors influencing crude sentiment:
U.S. tariffs on Venezuelan oil exports
Sanctions on Chinese buyers of Iranian crude
4.6M-barrel drop in U.S. crude inventories
Temporary U.S.-Russia-Ukraine ceasefire on energy targets
While near-term supply shocks are buoying oil, the demand outlook remains clouded by macroeconomic risks.
WTI Technical Outlook: Resistance at $69.67
WTI crude is testing a critical resistance zone at $69.67, a level reinforced by both a descending trendline and horizontal resistance. Price action remains hesitant, with bulls unable to secure a breakout.
The Relative Strength Index (RSI) has rolled over from overbought levels and is currently printing a bearish crossover below 64, suggesting cooling momentum.
Levels to watch:
Immediate support: $68.50
EMA buffer: $68.09 (50-period)
Deeper downside targets: $67.61 and $66.59
Breakout upside: $70.45 and $71.24
Until a decisive break above $69.67 occurs, the bias remains neutral to bearish, especially amid rising uncertainty tied to trade policy and geopolitical negotiations.
Conclusion:
WTI’s rally is underpinned by supply disruptions and inventory drawdowns, but faces strong resistance and macro headwinds. Unless bulls breach $69.67 convincingly, the rally risks fading under the weight of looming tariffs and fragile geopolitical truces.
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