While lower oil prices benefit consumers and reduce inflation, sustained weakness could hurt US oil producers. Companies may slow drilling, cut spending, or lay off workers—especially in energy-heavy states like Texas and New Mexico. Additionally, US energy firms face higher costs for essential materials like steel tubing, now subject to a 25% tariff. With global demand weakening and supply increasing, oil prices may remain under pressure in the near term.

Moreover, eight key OPEC+ producers agreed to raise oil output by 411,000 barrels per day starting in May, much higher than the expected 140,000-barrel increase. This decision triggered a sharp sell-off in oil markets, with Brent crude oil (BCO) dropping below $65 and WTI crude oil (CL) falling below $60 per barrel. The move reflects OPEC’s response to shifting global market conditions, including Trump’s new tariffs and US output pressure. The larger-than-expected supply increase has added bearish momentum to oil prices, intensifying volatility in the energy sector.

WTI Crude Oil (CL) Technical Analysis
Oil Daily Chart – Long-Term Breakout

The daily chart for WTI crude oil shows that the price has broken below the long-term support range of $65-$66, initiating a strong decline. Prices have also broken the triangle pattern, as indicated by the red-dotted trendline, suggesting that further downside is likely. The 50-day and 200-day SMAs remain in a negative alignment, indicating that the broader trend remains bearish. The sharp drop has pushed WTI crude into oversold territory, possibly leading to a short-term rebound.