WTI Oil Drops to $74.90 Amid Tariff and Sanction Fears by Amit Gupta, Kedia Advisory
WTI Oil prices extended their losing streak for the sixth consecutive session, trading near $74.90, weighed by uncertainty over the impact of President Trump's proposed tariffs and energy policies. Concerns intensified following a rise in US crude inventories and potential sanctions on Russia. Additionally, market participants are evaluating the effects of a 10% tariff on Chinese imports, alongside threats of further tariffs on the EU, Canada, and Mexico. Supply-side disruptions eased slightly as Texas ports reopened after Winter Storm Enzo. Meanwhile, Saudi Arabia’s crude exports surged to an eight-month high despite a slight dip in production. These factors collectively contributed to bearish sentiment in the Crude Oil markets.
Key Highlights
* WTI Oil prices dropped to $74.90, marking the sixth consecutive session of losses.
* Trump's proposed tariffs and sanctions on Russia heightened market uncertainty.
* API data revealed a 1 million barrel increase in US crude inventories.
* Saudi Arabia’s crude exports hit an eight-month high, reaching 6.2 million bpd.
* Texas ports reopened after disruptions caused by Winter Storm Enzo.
West Texas Intermediate (WTI) Oil prices continued their downward trajectory, falling to $74.90 during early European trading on Thursday. This marks the sixth consecutive session of losses for Crude Oil, driven by heightened market uncertainty over the impact of President Donald Trump's proposed tariffs and energy policies. Concerns about global economic growth and energy demand have escalated, as traders assess the potential fallout from a 10% tariff on imports from China, the world’s largest Oil importer.
While the 10% tariff is significantly lower than earlier threats of a 60% rate, Trump’s additional threats of imposing 25% tariffs on Canada and Mexico, as well as new tariffs on the EU, have added to market unease. These geopolitical tensions have weighed heavily on investor sentiment, dragging WTI prices lower.
Adding to the bearish sentiment, the American Petroleum Institute (API) reported a 1 million barrel increase in US crude inventories for the week ending January 16. This rise follows five consecutive weeks of declining stockpiles, raising concerns about demand in the world's largest Oil consumer.
On the supply front, Saudi Arabia’s crude exports reached an eight-month high in November, climbing by 4.7% to 6.2 million bpd, even as production dipped slightly to 8.9 million bpd. Meanwhile, logistical disruptions in the US energy sector began to ease as ports in Texas reopened after being affected by Winter Storm Enzo.
Furthermore, President Trump’s threat to impose high levels of sanctions and tariffs on Russian imports has raised fears of potential supply disruptions. These developments, coupled with rising inventories and tariff uncertainty, continue to exert downward pressure on Crude Oil prices.
Finally
WTI remains under pressure at $74.90, as rising inventories, geopolitical risks, and tariff uncertainties dampen sentiment. Immediate support lies at $74.00, with resistance at $76.00.
Above views are of the author and not of the website kindly read disclaimer
