WTI crude oil price trades near two-month low amid rising supply concerns
WTI crude oil trades near a two-month low amid increased supply expectations
\West Texas Intermediate (WTI) crude oil continues to hover near a two-month low, trading at $68.53 per barrel, down from the previous close of $68.67. Market sentiment remains bearish, with concerns over rising supply expectations and a weakening demand outlook.
Brent crude has also declined, currently trading at $72.09 from its prior close of $72.20.The potential for a Russia-Ukraine peace deal has fueled speculation that sanctions on Russian oil exports may be lifted, leading to an increase in global crude supply. Additionally, concerns over economic growth—exacerbated by U.S. President Donald Trump’s tariff policies—have dampened demand expectations. Trump has already imposed 10% tariffs on Chinese imports and 25% duties on steel and aluminum, with plans to expand tariffs on additional sectors.
USOIL price dynamics (Jan 2025 - Feb 2025) Source: TradingView.
Chevron’s Venezuela license revocation adds to market uncertainty
Another key development impacting oil markets is Trump’s announcement to revoke Chevron Corp.’s oil license in Venezuela. This decision has sparked criticism from Venezuelan Vice President Delcy Rodriguez, who called the move “damaging and inexplicable”. The revocation could reduce Venezuelan oil exports, but the broader bearish sentiment in the market has limited any potential upside for crude prices.
Additionally, Iraq’s Kurdistan Regional Government has reached an agreement with the federal oil ministry to resume Kurdish crude exports, pending approval from Turkey. The Iraq-Turkey pipeline has been shut since March 2023 following an International Chamber of Commerce (ICC) ruling that required Turkey to pay Baghdad $1.5 billion in damages for unauthorized exports between 2014 and 2018. If Kurdish oil exports resume, it could further add to global supply pressures, weighing on oil prices.
Technical outlook: WTI remains bearish
WTI crude oil is currently trading around $68.75, slightly down by 0.03%, indicating continued bearish pressure. The pivot point stands at $69.25, with key support levels at $67.98 and $66.96. If prices break below $67.98, further selling pressure could drive WTI towards lower support levels.
On the upside, resistance is seen at $70.07, with a stronger barrier at $71.20. A break above $69.25 could signal a bullish reversal, but for now, WTI remains below the 50-day EMA ($70.47) and the 200-day EMA ($71.94), reinforcing a bearish trend.
Market outlook: Oil remains under pressure
WTI crude prices are expected to remain volatile in the near term as traders assess the impact of supply-side developments and economic uncertainties. A potential Russia-Ukraine peace deal, Trump’s tariff policies, and Kurdish oil exports will be critical factors influencing price action. Unless demand expectations improve, oil prices could continue to face downward pressure, with traders watching for key technical levels and geopolitical updates.
As previously discussed WTI crude oil has faced persistent selling pressure amid geopolitical developments and economic uncertainty.
