WTI crude price weakens to $72.5 as U.S. stockpile rise and tariffs weigh on sentiment
WTI crude drifts lower to $72.5 amid rising US inventories
West Texas Intermediate (WTI) crude oil extended losses in the late American session on Wednesday, slipping to $72.6 as rising U.S. crude stockpiles and a stronger US dollar pressured prices. The decline came after the US Energy Information Administration (EIA) reported a 3.463 million barrel increase in inventories for the week ending January 24, exceeding the prior week’s 1.017 million barrel decline.
Market expectations had forecast a rise of 3.7 million barrels, keeping the supply outlook uncertain.
USOIL price dynamics (Dec 2024 - Jan 2025) Source: TradingView.
U.S. stockpiles and Trump’s tariffs impact oil prices
Crude prices remain under selling pressure, as investors weigh the impact of President Donald Trump's latest tariff threats. The White House confirmed plans to impose a 25% tariff on imports from Canada and Mexico, set to take effect on February 1. The move raises concerns over supply disruptions, especially regarding crude imports, which could destabilize North American energy markets. UBS analyst Giovanni Staunovo noted that while current levels may offer support, ongoing Trump-related policy moves could drive market volatility in the near term.
Meanwhile, the Federal Reserve maintained interest rates at 4.25%-4.5% during its January meeting, offering no clear guidance on future rate cuts. The resulting strength in the US dollar has exerted downward pressure on oil prices, making crude more expensive for foreign buyers and dampening demand.
Technical outlook: Key support and resistance levels
WTI crude is currently trading at $72.51, down 0.61%, struggling to hold above the $73.49 pivot level. The 50-day EMA at $73.73 and 200-day EMA at $74.62 serve as strong resistance, reinforcing bearish sentiment.
A break above $73.49 could signal upside momentum, targeting $74.93 with potential to reach $75.95. However, if WTI fails to reclaim this level, it may decline further toward $72.32, with $71.25 as the next key support.
Previously, we discussed WTI’s price fluctuations around $76, influenced by geopolitical uncertainty and OPEC+ production strategies. The latest developments underscore the continued volatility driven by US trade policies and demand concerns, keeping traders cautious in the near term.
