Oil News: Crude Prices Stagnate as Economic Fears Counter Supply Tightness

Crude Oil Prices Steady as Economic Uncertainty Offsets Supply Tightness

Light crude oil futures are trading with a mixed bias on Thursday, showing slight weakness as traders struggle to push prices past key technical resistance levels.

After bottoming at $65.22 last week, WTI crude has been in a consolidation phase, facing stiff resistance at $69.18 and $70.35, corresponding to the 50% and 61.8% Fibonacci retracement levels. The 200-day moving average at $70.39 remains a major obstacle, reinforcing the “sell the rally” sentiment in the market.

At 11:25 GMT, Light crude oil futures are trading $67.46, down $0.22 or -0.33%.

Supply Data Supports Prices, But Economic Fears Weigh

Oil prices found support midweek after U.S. gasoline stocks posted a significant drawdown of 5.7 million barrels, far exceeding analyst expectations of a 1.9 million-barrel decline. Distillate inventories also fell more than anticipated, despite a build in crude oil stocks.

The data fueled expectations of rising seasonal demand, helping crude rally 2% on Wednesday. However, macroeconomic concerns—including the threat of escalating trade tariffs and their impact on global growth—continue to limit bullish momentum.

U.S. President Donald Trump’s renewed focus on tariffs, particularly his move to impose additional duties on steel and aluminum imports from Canada, has rattled investor confidence. Markets are wary of potential retaliatory measures from major trading partners, which could disrupt economic activity and dampen energy demand. Additionally, U.S. stock markets experienced steep declines, with the Nasdaq falling 4%—its sharpest drop since 2022—further weighing on crude sentiment.

OPEC+ Faces Compliance Challenges Amid Rising Output

On the supply front, OPEC+ reported a notable increase in February production, led by Kazakhstan. The producer group is set to raise output in April, although analysts suggest that prolonged price weakness could force them to reconsider.

Russia’s Deputy Prime Minister Alexander Novak stated that OPEC+ may adjust its strategy post-April if market conditions warrant it. Meanwhile, U.S. crude production is expected to surpass earlier projections, reaching an average of 13.61 million barrels per day this year, adding further pressure on prices.

Market Outlook: Choppy Trade Likely to Persist

Crude oil prices remain caught between conflicting forces. The significant draw in U.S. fuel inventories points to firm near-term demand, while macroeconomic uncertainties—particularly concerns over a U.S. recession and trade-related disruptions—keep traders cautious.

With WTI struggling against key resistance levels, a decisive breakout above $70.39 is needed to shift sentiment bullish. Until then, the market is likely to remain range-bound, with traders selling into rallies and buying on dips near key support levels.

More Information in our Economic Calendar.