WTI crude recovers to $71.25 but struggles amid trade concerns
WTI crude climbs to $71.25 but lacks strong bullish momentum
West Texas Intermediate (WTI) crude oil extended its rebound on Monday, climbing to $71.25 per barrel, marking a second straight day of gains. The rally comes after the United States imposed new sanctions on Iran, targeting individuals and vessels involved in crude exports to China.
President Donald Trump reaffirmed his maximum pressure policy on Iran, aiming to cut its oil exports to zero. This heightened supply concerns and provided support to oil prices.Despite the upward momentum, WTI crude remains cautiously positioned, with gains lacking strong bullish conviction. The recent uptrend follows a decline to year-to-date lows near $70.25, seen last week.
USOIL price dynamics (December 2024 - February 2025) Source: TradingView.
Trade tensions cap oil’s upside
While supply constraints boosted oil prices, concerns over global trade tensions kept a lid on further gains. Trump’s latest 25% tariffs on steel and aluminum imports, coupled with China’s retaliatory duties on US goods, have fueled worries about slower economic growth and reduced fuel demand.
Analysts warn that higher tariffs could disrupt US energy infrastructure, as domestic drillers rely on imported specialty steel. The broader uncertainty surrounding the US-China trade war continues to weigh on market sentiment.
U.S. dollar strength adds further pressure
A modest rise in the US dollar also contributed to limiting oil’s upside. The greenback gained on expectations that Trump's protectionist measures could drive inflation higher, reducing the scope for Federal Reserve rate cuts. A stronger dollar makes crude oil more expensive for international buyers, further constraining price gains.
For WTI crude to sustain its recovery, strong follow-through buying is needed. If prices break above $72.00, it could signal further upside, while failure to hold above $70.30 may lead to a renewed selloff.
On the basis of previously analyzed charts, WTI remains in a recovery phase but faces strong resistance near $72.00 as trade concerns persist.
