After a bullish rally on Wednesday, oil prices edged lower on Thursday, retracing as traders weighed intensifying tariff disputes against expectations for stronger seasonal demand. While the rally was primarily fueled by tighter-than-expected oil inventories, tariff uncertainty and OPEC+ output increases add to market volatility, keeping traders cautious.
Oil Prices Dip as Tariff Concerns Weigh on Market Sentiment
WTI crude oil retreated by 0.17% to $67.533 after hitting a session high on Thursday. Brent crude oil followed a similar pattern, retreating 0.1% to $70.88 per barrel.
The Energy Information Administration (EIA) reported that U.S. gasoline inventories fell by 5.7 million barrels, exceeding forecasts of a 1.9 million-barrel draw. Meanwhile, U.S. crude stockpiles rose by 1.4 million barrels, a smaller-than-expected build that signaled resilient demand. Such tighter than expected oil inventories drove bullish momentum in oil prices on Wednesday.
Despite so, concerns about the global economy and trade tensions remain dominant factors for the dip. U.S. President Donald Trump’s latest tariff threats on European Union goods, coupled with Canada and Mexico preparing retaliatory measures, have heightened uncertainty. Traders fear that escalating trade disputes could slow global growth, ultimately weighing on energy demand.
At the same time, the market is monitoring OPEC+ production levels. The latest report from the group showed that total output rose by 363,000 barrels per day in February, driven primarily by the increased production by Kazakhstan. While OPEC maintained its global demand growth forecast for 2025, the market remains wary of potential supply-side pressures.
Technical Analysis
The CL-OIL (Crude Oil) price is trading around $67.53, reflecting a -0.17% decline on the session. The price peaked at $67.77 before facing resistance at $67.86, leading to some consolidation. The moving averages (5, 10, 30) indicate an uptrend, though signs of exhaustion are emerging. The MACD remains positive, but a slight downturn in momentum suggests potential retracement if buyers fail to push through resistance.
Picture: Crude oil stalls at resistance near $67.86, consolidation ahead, as seen on the VT Markets app.
If bullish momentum resumes, a break above $67.86 could open the door toward $68.20. However, if oil retraces, support is seen at $67.00, with further downside risk toward $66.50. Traders should watch for inventory data, OPEC+ decisions, and global demand trends to gauge the next significant move.
Short-term oil prices could remain volatile, with tariff policy shifts and economic data releases acting as key drivers. The sharp decline in U.S. gasoline inventories suggests stronger seasonal demand, which could limit further losses. However, any escalation in trade tensions or additional supply increases from OPEC+ could cap upside momentum.
