Crude oil prices remain under pressure, struggling to gain upside traction as bearish fundamentals dominate sentiment. A combination of OPEC+ supply hikes, trade war escalations, and weak demand indicators has kept oil bulls at bay, reinforcing a bearish outlook for the market. While a short-term technical rebound was observed, the broader downtrend remains intact.

OPEC+ Production Hike Adds to Bearish Sentiment

OPEC+ surprised the market with its decision to raise production quotas for the first time since 2022, adding 138,000 barrels per day (bpd) to supply starting in April. While the increase is relatively small, traders are wary that this could be the first step toward unwinding the group’s larger production cuts. Analysts caution that OPEC+ may further loosen supply discipline if demand conditions deteriorate, potentially intensifying the supply glut.

The market had largely expected OPEC+ to maintain its output curbs, making this production decision a key bearish catalyst. Some analysts believe political motivations may be at play, with former U.S. President Donald Trump reportedly favoring lower oil prices. This shift in OPEC+ strategy has forced traders to reassess supply expectations, adding to volatility in crude markets.

U.S. Tariffs and Retaliatory Measures Threaten Demand Growth

New U.S. tariffs on Canadian and Mexican crude oil imports have injected further uncertainty into the market, exacerbating fears of weaker demand. The U.S.…

Crude oil prices remain under pressure, struggling to gain upside traction as bearish fundamentals dominate sentiment. A combination of OPEC+ supply hikes, trade war escalations, and weak demand indicators has kept oil bulls at bay, reinforcing a bearish outlook for the market. While a short-term technical rebound was observed, the broader downtrend remains intact.

OPEC+ Production Hike Adds to Bearish Sentiment

OPEC+ surprised the market with its decision to raise production quotas for the first time since 2022, adding 138,000 barrels per day (bpd) to supply starting in April. While the increase is relatively small, traders are wary that this could be the first step toward unwinding the group’s larger production cuts. Analysts caution that OPEC+ may further loosen supply discipline if demand conditions deteriorate, potentially intensifying the supply glut.

The market had largely expected OPEC+ to maintain its output curbs, making this production decision a key bearish catalyst. Some analysts believe political motivations may be at play, with former U.S. President Donald Trump reportedly favoring lower oil prices. This shift in OPEC+ strategy has forced traders to reassess supply expectations, adding to volatility in crude markets.

U.S. Tariffs and Retaliatory Measures Threaten Demand Growth

New U.S. tariffs on Canadian and Mexican crude oil imports have injected further uncertainty into the market, exacerbating fears of weaker demand. The U.S. imposed a 10% duty on Canadian energy exports, with reports suggesting it may soon be lifted for select products. Mexico’s status remains unclear, adding another layer of concern for Gulf Coast refiners who rely on Mexican crude for blending.

China, another major oil consumer, responded to U.S. tariffs by increasing levies on American agricultural products and restricting U.S. company operations. The escalating trade war has raised concerns about slowing global economic growth, which in turn could reduce energy demand. Goldman Sachs warned that while tariffs do not directly impact crude prices, they create headwinds for economic activity, dampening industrial fuel consumption.

U.S. Crude Inventories Build as Refinery Demand Softens

The latest data from the U.S. Energy Information Administration (EIA) revealed a larger-than-expected build in crude oil inventories, with stockpiles rising by 3.6 million barrels last week. The increase was largely attributed to seasonal refinery maintenance, which led to lower processing rates. Refineries operated at 85.9% capacity, down from the previous week.

Despite the rise in crude stocks, gasoline and distillate fuel inventories declined, suggesting stronger refined product demand. However, the broader inventory trends reinforce concerns that oil markets are still oversupplied, particularly in light of additional OPEC+ barrels hitting the market in April.

Geopolitical Risks Remain, but Demand Concerns Dominate

While geopolitical risks persist, their impact on crude prices has been overshadowed by bearish fundamentals. Reports suggest the White House may ease sanctions on Russian oil exports following a shift in U.S. foreign policy toward Ukraine. If sanctions relief materializes, it could further pressure oil prices by allowing more Russian crude to reach global markets.

Meanwhile, the U.S. has ramped up sanctions on Iran, aiming to curb its oil exports and disrupt its economy. Treasury Secretary Scott Bessent confirmed that Washington is reviewing all existing waivers that provide Iran with economic relief, signaling a more aggressive stance. However, analysts believe spare capacity in the market could offset any supply disruptions from Iran, making demand-side risks the greater concern for oil prices.

Weekly Light Crude Oil Futures

WTI

Trend Indicator Analysis

The main trend is up according to the weekly swing chart, however, momentum is trending lower with the market trading on the bearish side of the 52-week moving average at $71.23. This is new resistance along with a pair of pivots at $69.53 and $70.78.

The downside momentum indicates traders have their eyes on three key bottoms, $64.75, $61.58 and $59.52.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending March 14 is likely to be determined by trader reaction to $71.23.

Bullish Scenario

A sustained move over $71.23 will signal the presence of strong buyers. If this creates enough near-term momentum, we could see a possible retest of $72.32. This move will be difficult to achieve from current price levels, which means the market is in a bearish position.

Although it won’t create a bullish scenario, per se, a steep plunge int $64.75 to $59.52 could bring in the bottom-pickers, which may fuel a strong short-covering rally.

Bearish Scenario

A sustained move under $69.53 will indicate the presence of counter-trend sellers. The weekly chart indicates there is plenty of room to the downside with the first target $64.75, followed by $61.58 and $59.52.

Market Outlook: Further Downside Risk with Limited Upside Potential

The crude oil market remains biased to the downside, with multiple headwinds keeping a lid on price gains. OPEC+ supply increases, ongoing trade tensions, and weak refinery demand have reinforced bearish sentiment. While a short-term rebound was observed, technical resistance is likely to cap any sustained rally.

If crude prices break below key support levels, further selling pressure could accelerate, exposing lower technical targets. Unless a major bullish catalyst emerges, such as a significant demand rebound or a shift in OPEC+ policy, traders should expect continued volatility with a bearish tilt in the near term.

Technically, light crude oil futures are trading on the weakside of the 52week average $71.23, which should be enough to call it bearish. Our work suggests the market is headed toward $64.75 to $59.52, where aggressive countertrend buyers could be waiting.

We could be nearing the liquidation phase of this current selloff, which means we could see freefalling prices into the former support levels at $64.75, $61.58 and $59.52. The cause of any steep liquidation next week is likely to be “margin call” selling. During a massive break in the stock market, hedge funds are often forced to liquidate other positions to meet the market call. Crude oil could be one of those markets that they sell.