WTI oil prices consolidate just below a new multi-week high, as traders await President Trump’s decision on tariffs
WTI oil prices are trading just below a new five-week high of $72.08, reached on Tuesday, after a 2.8% rally on Monday, the largest daily gain since January 15.
The slight pullback observed so far appears to be more of a consolidation than significant profit-taking, as markets remain quiet ahead of President Trump’s tariff announcement, which is expected later today.
Several factors are supporting oil demand, including threats from the US to impose secondary tariffs on buyers of Russian oil, better-than-expected economic data from China, which fuels optimism for stronger demand from the world’s largest oil importer, and rising tensions between the US and Iran.
OPEC+ is scheduled to meet on Thursday, with expectations that they will stick to plans to increase production starting in May, which could partially offset the current positive factors.
The market is now focused on President Trump’s tariff announcement, which is anticipated to be a major driver for price action.
Markets are likely to experience volatility, with reactions heavily dependent on the size and scope of the new tariffs.
If Trump’s rhetoric on tariffs is aggressive, it could intensify fears of an economic slowdown and rising inflation, potentially weighing on short-term outlooks and causing oil prices to retreat.
On the other hand, a softer-than-expected stance on tariffs could sustain the bullish trend and provide additional support for oil prices.
Technical indicators are mixed on the daily chart, with positive momentum remaining strong. The daily Tenkan-sen is moving higher and diverging from the daily Kijun-sen after a bullish crossover. However, the price action is still under pressure from the thickening daily Ichimoku cloud, with the cloud base at $71.58.
Key support levels are at $70.69/62 (100DMA / broken Fibo 38.2%), followed by the $70 psychological level, reinforced by the rising daily Tenkan-sen.
The cloud base marks the first resistance level, followed by the $72.08 high and $72.28/50 (50% retracement of $79.35/$65.22 / 200DMA).
Res: 72.08; 72.28; 72.50; 73.12
Sup: 70.62; 70.42; 70.00; 69.70
