- WTI meets with some supply during the Asian session, though it lacks follow-through.
- Worries about the economic fallout from Trump’s tariffs cap the upside for the commodity.
- Geopolitical risks should act as a tailwind for the black liquid amid a broadly weaker USD.
West Texas Intermediate (WTI) US Crude Oil prices attract some sellers following an Asian session uptick to mid-$69.00s, albeit the downtick lacks bearish conviction. The commodity currently trades around the $68.80 region, nearly unchanged for the day amid mixed fundamental cues, and remains within striking distance of a multi-week high touched last Wednesday.
Concerns that US President Donald Trump’s aggressive trade tariffs could weigh on global growth and dent fuel demand act as a headwind for the black liquid. Furthermore, the OPEC+ group is set to begin its program of monthly increases in oil production in April, Moreover, reports suggest that the group will likely continue to raise oil output in May, which turns out to be another factor capping the upside for the commodity.
Meanwhile, Trump warned that he may impose secondary tariffs on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine. Trump also threatened Iran with bombing and secondary tariffs if it did not come to an agreement on the nuclear program. This raises the risk of a potential supply disruption from Russia and Iran, which, in turn, is seen lending some support to Crude Oil prices.
Furthermore, the growing acceptance that the Federal Reserve (Fed) will resume its rate-cutting cycle soon amid a tariff-driven US economic slowdown drags the US Dollar (USD) lower for the third straight day. This might further contribute to limiting the downside for the USD-denominated commodity, making it prudent to wait for strong follow-through selling before confirming that the recent move-up has run out of steam.
