WTI crude oil price consolidates below $72.50 amid mixed fundamentals
A WTI crude oil price chart highlighting key support and resistance levels
West Texas Intermediate (WTI) crude oil remains under pressure on Friday, trading near $72.14 per barrel, retreating from Thursday’s close of $72.44. Despite its recent recovery, WTI is struggling to sustain momentum amid a mixed fundamental backdrop.
However, the commodity appears poised to snap a four-week losing streak, supported by supply disruptions and renewed demand optimism in the U.S.
USOIL price dynamics (January 2025 - February 2025) Source: TradingView.
Supply disruptions and demand optimism offer support
WTI crude prices have been supported by concerns over supply chain disruptions in Russia, particularly following intensifying Ukrainian drone attacks on Russian oil infrastructure. The attacks have disrupted key oil pumping stations, leading to speculation about potential long-term effects on global supply.
Additionally, U.S. crude oil inventories rose last week, according to the Energy Information Administration (EIA). However, gasoline and distillate stockpiles fell, indicating steady consumer fuel demand. The recent weakness in the U.S. dollar (USD), which is trading at its lowest level since December 10, has also provided additional support for oil prices, making crude more attractive to foreign buyers.
Headwinds from trade concerns and slowing global demand
Despite these bullish factors, fears over a potential slowdown in global economic growth due to U.S. President Donald Trump's trade policies have kept traders cautious. The proposed tariffs on major commodities could dampen economic activity and reduce fuel consumption, limiting the upside potential for WTI.
Furthermore, slowing demand from the Eurozone and China continues to raise concerns about the overall strength of the energy market. China’s sluggish industrial activity and weaker-than-expected economic data from Europe suggest a potential decline in demand, reinforcing traders' cautious stance.
Market outlook and key data to watch
WTI remains in a narrow consolidation range below $72.5, with traders awaiting the release of global flash PMI data for further clues on the economic outlook. A strong PMI reading could signal robust industrial demand, supporting higher oil prices, while disappointing figures might reinforce downside risks.
In our last analysis, we highlighted WTI’s struggle near the 200-EMA and resistance at $72.79. The price action remains below this key level, reinforcing the need for a breakout to confirm a sustained bullish trend.
