Oil drops to a four-year low as intensifying trade war deepens market gloom

WTI crude extended losses on Wednesday, plunging to a fresh multi-year low of $56.70—its weakest level since January 2021—as mounting concerns over the global economic outlook continued to pressure oil prices.

The latest blow came from the U.S. announcement of steep new import tariffs on Chinese goods (104%), intensifying fears of a prolonged standoff between the world’s two largest economies and top oil consumers.

Oil has now declined for five straight sessions, following the previous week’s introduction of sweeping reciprocal tariffs by the U.S. Sentiment remains firmly bearish, with no clear signs of exhaustion as traders brace for deeper fallout from the trade conflict, compounded by OPEC+’s recent decision to boost output further.

The only mildly supportive factor came from an unexpected draw in U.S. crude inventories, according to Tuesday’s API report, which hints at stronger domestic demand but offered little relief in the face of overwhelming bearish pressure.

Technical indicators on the daily chart remain firmly negative, reinforcing the downtrend, with extremely oversold conditions potentially leading to a temporary consolidation before another leg lower.

Initial resistance levels are seen at $60.00 and $60.40, with stronger rebounds likely capped beneath the $62.50–$63.00 area.

On the downside, the next key support lies at $53.87 (61.8% Fibonacci retracement of the broader $6.52–$130.48 rally), with a clear break opening the path toward the psychological $50.00 mark.

Res: 58.95; 60.00; 60.40; 61.09
Sup: 56.70; 55.87; 55.15; 53.87