WTI price forecast: Oil slumps below $68 as OPEC+ plans to raise output

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Oil Falls Below $68 as OPEC+ Production Plans Pressure Market

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Jainam Mehta

04.03.2025

WTI price forecast: Oil slumps below $68 as OPEC+ plans to raise output — WTI crude oil declines amid rising output and escalating global trade tensions

West Texas Intermediate (WTI) crude oil futures declined to $67.70 per barrel during early European trading hours on Tuesday, extending losses to a three-month low. The sharp downturn comes as the Organization of the Petroleum Exporting Countries and allies (OPEC+) confirmed plans to increase oil production starting in April.

The move follows a prolonged period of output cuts, initially implemented to stabilize prices amid weakening global demand.

In addition to OPEC+ production adjustments, the implementation of U.S. tariffs on Canada, Mexico, and China has intensified concerns over global trade stability. U.S. President Donald Trump reaffirmed that 25% tariffs on Canadian and Mexican goods would take effect on March 4, alongside a 10% tariff on Chinese imports. In response, China imposed retaliatory tariffs of up to 15% on U.S. agricultural products, set to take effect on March 10.

USOIL price dynamics (Jan 2025 - Mar 2025) Source: TradingView.

Trade war fears weigh on oil demand outlook

The escalating trade tensions have heightened fears of a global economic slowdown, which could weigh on crude oil demand. As China remains the world’s largest importer of oil, additional tariffs and economic headwinds may reduce its energy consumption, further pressuring prices.

Additionally, peace talks between Russia and Ukraine have stalled, raising geopolitical uncertainty that could influence supply dynamics in the coming weeks.

Market analysts remain cautious about near-term price movements. Bob Yawger, director of energy futures at Mizuho, noted that "crude oil is under siege on multiple fronts and is vulnerable to the latest bearish headline or economic data." This aligns with weaker-than-expected U.S. ISM Manufacturing PMI data, which fell to 50.3 in February from 50.9 in January, signaling a potential slowdown in industrial activity.

Technical Outlook and Key Levels to Watch

From a technical perspective, WTI is trading below its 12-week low, and further downside could be possible if key support levels fail to hold. If prices breach the $67 support zone, the next downside target could be around $65.50–$66. Conversely, a recovery above $69.50–$70 could indicate renewed bullish momentum, though any upside may be capped by ongoing supply concerns.

As previously discussed, the market remains focused on OPEC+ supply adjustments, geopolitical developments, and potential retaliatory measures from major economies. If trade tensions escalate further, oil could remain under pressure in the coming weeks. However, if demand signals improve and economic uncertainty stabilizes, a moderate rebound could be expected.

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