WTI crude oil price gains on supply concerns as trade tensions linger
WTI crude rises above $72 as Russian supply cuts intensify
West Texas Intermediate (WTI) crude oil prices extended gains on Wednesday, climbing to $72.24 per barrel, up from Tuesday’s close at $71.74. Supply disruptions in Russia following drone strikes on a major pumping station of a pipeline carrying Kazakhstan’s crude to global markets fueled bullish sentiment.
However, concerns over U.S. trade policy under President Donald Trump remain a potential headwind for oil prices.
USOIL price dynamics (January 2025 - February 2025) Source: TradingView.
Supply disruptions drive WTI higher
WTI’s rally was largely driven by reduced oil flows from Russia, following a 30-40% supply cut after Ukrainian drone attacks on key infrastructure. Deputy Prime Minister Alexander Novak confirmed the disruption, with Reuters estimating a 380,000 barrels per day reduction in global crude supply. This development intensified concerns about tightening oil markets, particularly amid ongoing geopolitical tensions in Eastern Europe.
Meanwhile, Brent Crude oil also advanced, rising to $75.94 per barrel, up from $75.45 on Tuesday. The broader oil market remains sensitive to supply chain risks, with traders closely monitoring potential retaliatory measures from Russia.
Trade tensions could cap oil’s upside
Despite strong supply-driven gains, WTI’s bullish momentum faces risks from potential U.S. tariffs on key industries, which could impact global trade flows. President Donald Trump has hinted at 25% tariffs on foreign automobiles, semiconductor chips, and pharmaceuticals, further stoking fears of a trade war that could weaken global demand.
Market participants are closely watching the U.S. tariff policy, particularly as Trump’s administration finalizes reciprocal trade measures. Any escalation in tariff-driven economic slowdown could pressure WTI prices, especially as demand outlooks for 2025 remain mixed.
Technical outlook: Key resistance and support levels
WTI crude oil remains near the $72.36 mark, showing bullish momentum but facing key resistance levels. The immediate resistance stands at $72.79, aligning with the trendline and acting as the upper resistance level. A major resistance point is observed at $72.57 (200 EMA), and a breakout above this level could confirm an uptrend.
On the downside, immediate support levels are at $72.21 (50 EMA), $71.64 (100 EMA), and $71.50 (20 EMA), which are crucial for maintaining short-term bullish momentum. A stronger support zone is seen at $70.10, aligning with the trendline support level, and if breached, it could lead to further downside movement. The 50-day EMA at $72.21 reinforces bullish sentiment, while the 200-day EMA at $72.57 remains a key obstacle for further gains. If WTI successfully breaks above $72.79, it could extend towards $73.65, confirming a shift in trend.
Outlook: Key factors to watch
Traders will monitor U.S. tariff developments, as well as any further escalations in supply disruptions from Russia. Additionally, OPEC+ supply strategies and the Federal Reserve’s policy stance on interest rates will play crucial roles in shaping WTI’s trajectory in the coming weeks.
Previously, WTI struggled to hold above $71.50, with resistance at $72.62 proving a strong barrier. Today’s price action confirms the persistence of this range, with market sentiment hinging on geopolitical and economic policy shifts.
