Oil News: Trump Tariff Threats Send Crude to Pivotal $75 Level as Inventory Surges

Crude Oil Prices Struggle Amid Tariff Uncertainty and Rising Inventories

Light crude oil futures edged higher on Thursday, recovering slightly after a four-day sell-off. Prices hovered around a key pivot at $75.47, signaling a potential turning point for traders. A decisive move above this level could open the path to $80.00, while a break below could lead to a test of the 200-day moving average at $71.00.

At 11:34 GMT, Light Crude Oil Futures are trading $75.68, up $0.25 or +0.33%.

Uncertainty Looms Over Trump’s Tariff Proposals

Crude oil markets are grappling with uncertainty as U.S. President Donald Trump’s proposed tariffs cloud global economic growth prospects. Trump recently hinted at imposing 25% tariffs on goods from Canada and Mexico and a 10% levy on imports from China due to ongoing disputes, including accusations over fentanyl exports. Tariff threats against the European Union and additional sanctions on Russia further weigh on sentiment, adding to trader concerns over energy demand.

Market analysts note that Trump’s pro-drilling policies and the easing of geopolitical tensions in Gaza have tempered fears of supply disruptions. However, the broader implications of trade barriers could curtail oil demand growth, casting a shadow over the market.

Rising U.S. Inventories Add Bearish Pressure

U.S. crude inventories climbed by 958,000 barrels in the week ending January 17, according to the American Petroleum Institute (API). Gasoline stocks surged by 3.23 million barrels, while distillate inventories increased by 1.88 million barrels, contributing to the bearish undertone. Analysts had expected a crude drawdown of 1.6 million barrels, but these higher inventory figures may limit upward price momentum in the near term.

Trade and Sanctions Shift Market Focus

Market sentiment is shifting from U.S. sanctions on Russian oil exports to potential trade disruptions driven by Trump’s policies. Proposed tariffs could dampen global economic growth and reduce energy consumption. Additionally, the U.S. has signaled a possible cessation of oil imports from Venezuela, further complicating the supply picture. Venezuela, an OPEC member, increased oil exports to the U.S. in 2024, but looming policy changes could alter trade flows.

Saudi Arabia’s crude oil exports in November reached an eight-month high, reflecting OPEC’s ongoing efforts to balance the market. Iran also offered conciliatory gestures to Western leaders, signaling potential cooperation despite ongoing sanctions.

Market Forecast: Rangebound with Downside Risks

Crude oil prices are likely to remain rangebound in the near term, with the $75.47 pivot acting as a key determinant for future direction. While rising U.S. inventories and tariff uncertainties create downside risks, seasonal demand and potential geopolitical disruptions may provide support.

A sustained move above $75.47 could push prices toward $80.00, but failure to hold this level may see prices retreat to the 200-day moving average at $71.00.

Traders should closely monitor inventory data and further developments in U.S. trade policy for actionable signals.

More Information in our Economic Calendar.