Oil News: Crude Plunges Over 3% After Trump Tariff Surprise and Stock Build

Crude Falls Sharply as Tariff Shock, Inventory Build Weigh on Oil Prices

Light crude futures dropped over 3% on Thursday, sinking below key technical support levels, as fears of a global economic slowdown intensified following a surprise U.S. tariff announcement. Prices breached the 200-day moving average at $70.08 and the 50-day at $69.92, triggering a wave of selling.

Prices had rallied earlier in the week but stalled beneath resistance at the $72.11–$73.78 Fibonacci retracement zone. The market is now testing critical support between $68.56 and $67.72. A brief technical bounce is possible, but if $67.72 fails, a further drop toward $66.09 or even $65.01 could follow, completing a full retracement of the previous leg higher.

At 10:28 GMT, Light Crude Oil Futures are trading $68.45, down $3.26 or -4.55%.

Trump Tariffs Raise Global Demand Concerns

The sell-off accelerated after President Trump announced a sweeping 10% minimum tariff on most U.S. imports, escalating fears of a broader trade war. While oil and refined products were excluded from the new duties, traders remain focused on the broader economic risk to fuel consumption.

Analysts warn that higher tariffs could stoke inflation and slow global growth, undermining demand in the world’s largest oil-consuming economy. “The final decision was more hawkish than expected,” said IG’s Yeap Jun Rong, pointing to the market’s surprise. UBS responded by trimming its oil price projections by $3 per barrel for the next two years, citing deteriorating fundamentals.

Demand Fears Amplified by U.S. Inventory Surprise

Bearish sentiment was further compounded by U.S. Energy Information Administration data showing a 6.2 million barrel increase in crude stocks, defying expectations for a draw of 2.1 million barrels. The build signals softer domestic demand and potentially higher production, adding to oversupply concerns.

Market attention is also fixed on the OPEC+ meeting, particularly regarding Kazakhstan’s production levels. While no major supply policy changes are expected, any shift could add volatility to an already unstable market.

Oil Prices Forecast: Near-Term Bearish Pressure Intensifies

The combination of technical weakness, heightened macroeconomic risk, and bearish inventory data points to a short-term bearish outlook for crude. Unless prices hold the $67.72 support level, the path of least resistance appears lower. Traders should prepare for further downside as tariff risks and supply concerns cloud demand forecasts.

More Information in our Economic Calendar.