Oil News: Pivot Resistance at $63.70 in Focus as Crude Sentiment Turns Cautious

Will Technical Levels Hold as Market Reacts to Trade War Risks?

Light crude futures saw modest gains Friday, climbing off a recent low of $55.12 hit midweek to peak at $63.34 on Thursday, before pulling back late in the session. This sharp price action has established clear technical zones: support at $59.23 and resistance at $63.70. These levels now serve as potential breakout points, with any sustained breach likely to trigger renewed directional momentum.

At 10:17 GMT, Light crude oil futures are trading $60.41, up $0.34 or +0.57%.

Despite Friday’s slight rebound, both Brent and WTI remain on track for their second consecutive weekly losses. Brent is down 3.5% for the week, and WTI has slipped 3%, following an 11% plunge the week prior. Brent’s brief dip below $60—a low not seen since February 2021—underscores the bearish sentiment driven by macroeconomic fears.

How Is the US-China Trade War Reshaping Oil Market Sentiment?

At the heart of current market weakness is the intensifying U.S.-China trade dispute. On Thursday, the U.S. hiked tariffs on Chinese goods to 145%. In response, China retaliated with its own tariff hike to 125%, effective Saturday. While tariffs were paused for other U.S. trading partners, tensions between the world’s two largest economies continue to dominate market sentiment.

Traders are weighing the risk that prolonged trade frictions will undermine global trade flows and economic output, ultimately curbing oil demand. PVM analyst Tamas Varga described current conditions as a “tariff-driven market,” where policy unpredictability is eroding investor confidence.

Will Demand Destruction Override Supply-Side Factors?

The U.S. Energy Information Administration (EIA) fueled bearish pressure by trimming both global and domestic oil demand forecasts. The agency cited tariff impacts as a key downside risk. Reinforcing this view, BMI analysts expect persistent trade hostilities to keep oil prices under pressure.

Further highlighting demand concerns, China—the world’s largest oil importer—is projected to see slower economic growth in 2025, according to a Reuters poll. ANZ Bank warned that if global GDP growth drops below 3%, oil consumption could decline by as much as 1%, adding to headwinds.

Oil Prices Forecast: Bearish Bias Persists Near Key Resistance

Despite intraday volatility and a modest recovery off recent lows, the broader tone remains bearish. With prices failing to reclaim and hold above resistance at $63.70, and macroeconomic concerns continuing to drag sentiment, the market is likely to remain under pressure. Unless trade tensions ease materially, the outlook for oil remains tilted to the downside.

More Information in our Economic Calendar.