Crude Oil Analysis
Afternoon: Crude Oil Under Pressure Amid US-China Trade War & Iran Tensions
Highlights:
- Geopolitical tensions and trade uncertainties continue to drive oil market volatility.
- Rising US crude inventories signal ample supply, adding downside pressure
- OPEC+ supply increases in April may further weigh on prices, despite Iran sanctions.
Overview:
Crude oil remains under pressure, trading below $73 per barrel, as investors weigh the impact of ongoing US-China trade tensions against heightened economic pressure on Iran. US President Donald Trump intensified his “maximum pressure” campaign on Iran, aiming to curb the country’s oil exports to zero, further straining geopolitical stability. Meanwhile, China retaliated against US tariffs by imposing levies on American coal, LNG, and crude oil, exacerbating concerns over weaker global demand.
On the supply front, OPEC+ reaffirmed its commitment to gradually increasing oil output starting in April, maintaining its strategy despite demand uncertainties. In the US, the American Petroleum Institute (API) reported a crude stock build of 5.025 million barrels, significantly exceeding expectations of a 3.17 million barrel rise, signaling ample supply in the market.
Key upcoming economic data include:
- US ADP Non-Farm Employment Change, Final Services PMI & ISM Services PMI
Technical Analysis & Trade Strategy
- Momentum: Bearish, with crude oil trading near support levels.
- Key Levels:
- Support: $71.20 (identified as a key demand zone).
- Resistance: $73.80 (potential hurdle for upward movement).
- Trade Action: Buy on dips near $71.70, targeting $73.60, with a stop loss below $70.70.
Support and Resistance Levels:
