Oil News Today: Can Dollar Weakness Help Light Crude Hold the Critical $75.47 Pivot?

Can Bulls Defend the $75.47 Pivot Level?

Light crude oil futures climbed higher on Wednesday, holding above the critical $75.47 pivot for a second day. This level has become a battleground for bullish traders aiming to prevent a sharp decline toward the 200-day moving average at $71.02. On the upside, resistance at $77.25, $78.28, and $79.44 presents the next hurdles for an extended rally. A decisive break above these levels could set the stage for further gains, while a slip below $75.47 risks triggering a deeper selloff.

At 11:48 GMT, Light crude oil futures are trading $76.08, up $0.25 or +0.33%.

Is the Dollar’s Decline a Lifeline for Oil Prices?

A weakening U.S. dollar provided critical support to oil prices, as the currency traded near two-week lows. The dollar’s softness makes crude more affordable for international buyers, bolstering demand. UBS analyst Giovanni Staunovo highlighted positive risk sentiment in financial markets, which has further lifted crude oil prices. Traders are also buoyed by expectations of falling U.S. crude inventories, though official data is still pending.

How Will Trump’s Trade and Energy Policies Shape Oil Markets?

Traders are closely scrutinizing President Donald Trump’s aggressive trade and energy policies. Trump has signaled potential tariffs of 10% on Chinese imports and up to 25% on goods from Mexico and Canada. These measures have created uncertainty in the energy market, with analysts warning of potential demand implications. ING analysts noted that attention is shifting toward the risk of trade tensions undermining global oil consumption.

On the supply side, Trump declared a national energy emergency to accelerate domestic oil and gas production. While this move is unlikely to significantly impact near-term output, Morgan Stanley analysts suggest it could mitigate declines in refined product demand over time.

Could Winter Storms and Supply Disruptions Fuel Higher Prices?

Extreme winter conditions have curtailed oil production in North Dakota, with losses estimated at 130,000 to 160,000 barrels per day (bpd). These supply disruptions, coupled with colder weather across the U.S. Gulf Coast, have introduced additional complexities to the oil market. Seasonal factors, such as increased heating demand, are offering near-term price support despite broader bearish pressures.

Will Crude Oil Rally or Retreat from Here?

The oil market’s outlook remains balanced on a knife’s edge. A sustained move above $77.25 could pave the way for gains toward $79.44, reinforcing bullish momentum.

However, failure to defend the $75.47 pivot could reignite selling pressure, with the 200-day moving average at $71.02 emerging as a key downside target.

Traders will closely monitor U.S. inventory data and the broader macroeconomic backdrop to determine the next move in crude oil prices.

More Information in our Economic Calendar.