Oil prices are facing downward pressure due to concerns about tariffs and potential impact on global demand. President Trump's comments about pressuring OPEC to lower prices add further complexity. While Libyan protests briefly threatened oil exports, the situation has stabilized. However, looming US tariffs on Canadian and Mexican goods remain a major concern, with potential implications for both crude oil and refined product prices. Technical analysis suggests a possible double bottom pattern for Brent crude oil, but the market outlook remains uncertain until the tariff situation and geopolitical risks are resolved.
Oil prices are facing continuous challenges to gain significant upward momentum. Persistent uncertainties surrounding tariffs and their potential impact on global demand are keeping market participants on edge. Adding to the complexity, US President Trump's recent comments about pressuring OPEC to lower prices have placed the oil cartel in a difficult position.
While oil prices saw a temporary boost yesterday due to news of Libyan protesters threatening to disrupt crude oil exports from two terminals, the situation quickly stabilized. The Libyan National Oil Corporation reported that operations resumed normally after discussions with the protesters, alleviating the initial concerns.However, the looming threat of tariffs remains a significant factor. Markets anticipate President Trump to impose a 25% tariff on all goods from Canada and Mexico, effective February 1st. This move, if implemented, could significantly impact US oil imports, as Canada is the largest supplier, providing approximately half of US oil imports, while Mexico contributes another substantial amount. Tariffs could also affect refined products like gasoline and increase transportation costs. Adding to the uncertainty, there appears to be a disagreement between President Trump and Treasury Secretary Scott Bessent regarding the implementation of tariffs. While Bessent favors a gradual approach, starting with a 5% tariff, President Trump has expressed support for tariffs on individual products and items.This uncertainty surrounding tariffs is exacerbating market anxieties, as participants grapple with the potential implications for global growth. While tariffs could potentially lead to higher oil and refined product prices, they also raise concerns about a potential slowdown in economic activity. Furthermore, the recent data from the Energy Information Administration (EIA) showing a rise in US crude inventories by 3.5 million barrels to 415.1 million barrels in the week ended January 24th, could further weigh on oil prices.However, the EIA data also revealed an increase in total US oil demand last week, offering a glimmer of hope. Looking ahead, the market awaits significant US dollar news to close the week, but the outcome of the tariff situation and geopolitical risks remain the dominant factors to watch. From a technical analysis perspective, Brent crude oil has reached a crucial support level, where a previous strong upward move initiated after a consolidation phase. Analyzing the four-hour chart reveals a double bottom pattern at the key support level of 76.35. For this pattern to play out, oil prices need to close above the previous swing high of 77.57, potentially propelling prices toward the psychologically significant 80.00 per barrel mark.The current oil market presents a classic dilemma for participants, as fundamental and technical outlooks appear to diverge. This discrepancy makes it challenging to navigate the market, and clarity on the tariff situation is crucial for a more defined path forward
OIL PRICES TARIFFS OPEC GLOBAL DEMAND US DOLLAR TECHNICAL ANALYSIS BRENT CRUDE OIL
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