WTI price declines as Trump proposes tariff hikes and boosts oil production
WTI crude dips to $75.50 as Trump's tariff and production boost weigh on prices
West Texas Intermediate (WTI) crude oil prices tumbled to $75.55 per barrel during Wednesday’s Asian session, marking the fourth consecutive session of declines. The drop comes in the wake of U.S. President Donald Trump’s announcement of a national energy emergency, aimed at expediting oil and gas production.
The move includes reversing previous administration policies to enhance domestic energy output, adding to concerns about a potential supply glut.
Further exacerbating market concerns, Trump reiterated plans to impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on goods from China starting February 1. These measures could stoke trade tensions and dampen global economic growth, pressuring demand for crude oil.
USOIL price dynamics (Dec 2024 - Jan 2025) Source: TradingView.
EIA projects oil price decline amid oversupply concerns
The Energy Information Administration (EIA) released its forecast on Tuesday, projecting a decline in oil prices for 2025. EIA economists cited an oversupply in petroleum production and slower global demand growth, fueled by weak economic activity and energy transition efforts, as major factors for the bearish outlook.
Despite the downward trend, recent U.S. sanctions on Russia continue to disrupt physical oil markets, providing intermittent support to prices.
Technical outlook: Key levels to watch
WTI crude futures continue to face selling pressure, with the pivot point at $76.05 serving as a critical threshold. A sustained drop below this level indicates further downside, with immediate support at $74.49 and stronger backing at $72.85.
Conversely, resistance levels at $77.68 and $79.12 could offer challenges for any bullish recovery. The 200-day EMA at $75.29 acts as a potential safety net, while the 50-day EMA at $76.77 reinforces short-term bearish sentiment.
In the previous analysis, we discussed WTI’s resilience around $76, supported by U.S. inventory data and geopolitical dynamics. These factors remain critical as the market digests Trump's tariff and energy production announcements.
