Crude Oil Declines Sharply Amid Market Uncertainty, OPEC+ Supply Adjustments

US equities continue to decline, leading to a sharp drop in oil prices. Brent crude oil (BCO) has fallen to $68.50, while WTI crude oil (CL) has dropped to $65.50. The ongoing uncertainty over tariffs and weak Chinese inflation data are major factors behind this decline. China’s consumer prices fell by 0.7% year-on-year in February, raising concerns about slowing economic activity. In response, speculative traders have reduced their positions in the oil market, with net long positions in ICE Brent decreasing by 61,121 lots to 159,425 lots, marking the lowest level since December.

Moreover, OPEC+ supply changes are adding another layer of pressure to oil prices. Saudi Arabia has adjusted its official selling prices (OSPs) for April, cutting prices across most markets, except for the US, where they remain unchanged. The price for Arab Light crude in Asia has been reduced by $0.40 per barrel to $3.50 per barrel over the benchmark. This price adjustment reflects growing concerns about an oversupplied market at a time when demand uncertainty remains high. China’s crude oil imports in the first two months of the year amounted to 83.85 million tonnes, averaging 10.4 million barrels per day, marking a 3.4% decline from the previous year. This is also lower than December’s import levels of around 11.3 million barrels per day. A combination of weaker demand from China and increased supply from OPEC+ could put additional downward pressure on oil prices in the coming weeks.

The Energy Information Administration (EIA) is set to release its latest Short-Term Energy Outlook, offering insights into US oil and gas production forecasts. Last month, the EIA projected U.S. crude oil production to grow by 380,000 barrels per day in 2025 and 140,000 barrels per day in 2026. However, given recent price fluctuations, these projections may be revised.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil shows that the price has broken the triangle pattern and reached long-term support around $65. After hitting this support, the price rebounded to the breakout region at $68. However, it failed to sustain its gains and appears strongly bearish, signalling a potential further drop. The 50-day SMA remains below the 200-day SMA, and the price is entering the oversold region. However, prices continue to decline after hitting the resistance of the red-dotted trend line, which indicates a further drop.

Oil 4-Hour Chart – Bearish Pressure

The 4-hour chart shows that the price rebounded from the support of the falling wedge but continues to trend downward. The RSI has hit the mid-level, indicating a likely further downside. As long as the price remains below $72.50, oil prices will likely stay under bearish pressure.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Resistance

The daily chart for natural gas (NG) shows the formation of an ascending channel after breaking above $3 from the neckline of the inverted head and shoulders pattern. Since the breakout, the price has been trading within the ascending channel. It recently hit $4.90 and reversed due to strong resistance in this region.

Natural Gas 4-Hour Chart – Inverted Head & Shoulders

The 4-hour chart for natural gas shows the formation of an ascending channel, with the price hitting resistance at $4.90 on the daily chart. The price has also formed an inverted head and shoulders pattern within this ascending channel, presenting a strongly bullish structure. A breakout above $5 will further induce bullish momentum in the natural gas market. However, a correction is likely to be considered a buying opportunity.

USDCAD Technical Analysis

USDCAD Daily – Positive Price Development

The daily chart for USDCAD shows a bullish structure after correcting back to $1.4270. The pair is moving upward following this correction but remains highly volatile. It has regained the 50-day SMA, indicating that bullish momentum is likely to continue.

US Dollar 4-Hour Chart – Symmetrical Broadening Wedge

The 4-hour chart for USDCAD shows the formation of a symmetrical broadening wedge pattern, confirming strong volatility in the pair. The recent rebound from $1.4270 has formed a rounding pattern, indicating bullish momentum within the symmetrical broadening wedge.