Crude oil markets remain under pressure this week as rising U.S. inventories, escalating U.S.-China trade tensions, and demand uncertainties continue to fuel volatility. After an initial rally driven by tariff concerns, prices have struggled to sustain gains, as traders digest the broader economic risks impacting supply and demand fundamentals.

Trump Administration Postpones Canada-Mexico Tariffs, But Trade Risks Persist

The Trump administration has delayed the implementation of new tariffs on Canadian and Mexican energy imports for 30 days, temporarily easing concerns over immediate supply disruptions. The original plan included a 25% levy on Canadian and Mexican oil, alongside a 10% tariff on other energy imports. The postponement provides a window for negotiations, offering refiners some relief from the potential cost increases.

Despite this temporary reprieve, trade tensions remain a major concern. The broader focus has shifted to the U.S.-China trade dispute, which has escalated following China’s decision to impose a 10% tariff on U.S. crude, along with levies on liquefied natural gas (LNG) and coal. This move adds downward pressure to global oil prices, as China is a key buyer of U.S. crude. With economic uncertainty rising, demand expectations continue to weaken, increasing the risk of further price declines.

Surging U.S. Crude Inventories Signal Weak Demand

Oil prices came under additional pressure after U.S. crude stockpiles surged well…

Crude oil markets remain under pressure this week as rising U.S. inventories, escalating U.S.-China trade tensions, and demand uncertainties continue to fuel volatility. After an initial rally driven by tariff concerns, prices have struggled to sustain gains, as traders digest the broader economic risks impacting supply and demand fundamentals.

Trump Administration Postpones Canada-Mexico Tariffs, But Trade Risks Persist

The Trump administration has delayed the implementation of new tariffs on Canadian and Mexican energy imports for 30 days, temporarily easing concerns over immediate supply disruptions. The original plan included a 25% levy on Canadian and Mexican oil, alongside a 10% tariff on other energy imports. The postponement provides a window for negotiations, offering refiners some relief from the potential cost increases.

Despite this temporary reprieve, trade tensions remain a major concern. The broader focus has shifted to the U.S.-China trade dispute, which has escalated following China’s decision to impose a 10% tariff on U.S. crude, along with levies on liquefied natural gas (LNG) and coal. This move adds downward pressure to global oil prices, as China is a key buyer of U.S. crude. With economic uncertainty rising, demand expectations continue to weaken, increasing the risk of further price declines.

Surging U.S. Crude Inventories Signal Weak Demand

Oil prices came under additional pressure after U.S. crude stockpiles surged well beyond expectations. The American Petroleum Institute (API) reported a build of over 5 million barrels, with the U.S. Energy Information Administration (EIA) later confirming an even larger increase of 8.7 million barrels.

Gasoline inventories also rose sharply, reinforcing concerns over softening demand in the U.S. Refinery maintenance season, combined with weaker consumer fuel consumption, has led to an oversupply situation. Analysts note that refiners are hesitant to ramp up production amid economic uncertainty, keeping inventory levels elevated and limiting any potential for price recovery.

OPEC+ Holds Production Policy as Iran Sanctions Loom

Despite global demand concerns, OPEC+ has reaffirmed its decision to proceed with planned production increases. The group appears focused on maintaining stable output, even as trade conflicts and economic slowdowns threaten consumption growth.

Geopolitical risks surrounding Iran also remain a key factor. The Trump administration has reinstated its “maximum pressure” campaign, aiming to reduce Tehran’s crude exports. While Iranian oil production remains high, additional U.S. sanctions could tighten supply in the coming months, introducing another layer of volatility to the market.

In an attempt to support prices, Saudi Aramco raised its official selling price for March crude shipments to Asia. This move reflects confidence in regional demand, but broader economic headwinds and high inventory levels have so far outweighed any bullish momentum.

Trump’s Push for More U.S. Oil Production Adds Uncertainty

Oil markets were further unsettled by President Donald Trump’s renewed call for increased domestic oil production. His administration has emphasized the goal of making the U.S. the dominant global energy supplier, a stance that has introduced additional volatility to the market.

Despite Trump’s comments, there is little evidence that U.S. drillers are increasing output. Industry analysts remain skeptical that producers will ramp up activity in the current price environment, as weaker demand forecasts and cost considerations continue to limit aggressive expansion.

Weekly Light Crude Oil Futures

WTI

Trend Indicator Analysis

The weekly trend remains up, but momentum has shifted to bearish.

In the short term, the range is set between $80.00 and $61.61, with immediate support at the 50% retracement level of $70.80. The broader range extends from $85.78 to $59.55, and prices are currently trading above the key pivot at $69.55, indicating a slightly friendly technical bias.

The psychological resistance at $80.00 remains a significant obstacle. However, the weekly chart suggests the path of least resistance is lower, with the $70.80–$69.55 zone offering solid value. A retest of this area could attract fresh aggressive buying interest. However, without a major catalyst, buyers may not show up, putting the market at risk of collapsing under $69.55.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending February 14 is likely to be determined by trader reaction to $70.80.

Bullish Scenario

A sustained move over $70.80 will signal the presence of strong buyers. If this creates enough near-term momentum, we could see a possible retest of $74.94 over the near-term.

Bearish Scenario

A sustained move under $70.80 will indicate the presence of counter-trend sellers. This could create the downside momentum needed to challenge a value zone with the bottom of the area coming in at $69.55. This price level could act like support initially, but if it fails then look out to the downside.

Market Outlook: Bearish in the Short Term, Volatility Ahead

Crude oil prices face continued bearish pressure due to rising inventories, trade conflicts, and slowing demand growth. While the delay in Canada-Mexico tariffs offers some short-term relief, the larger issue remains the deteriorating U.S.-China trade relationship, which could have long-term effects on global energy markets.

Geopolitical risks, including Iranian sanctions and OPEC+ supply decisions, could introduce some volatility. However, without a significant shift in fundamentals, upside potential appears limited. Traders remain focused on trade policy developments, inventory reports, and refinery activity to gauge the market’s next move.

Technically, the market is testing an important support zone at $70.80 to $69.55. We could see a counter-trend short-covering rally if crude oil futures can hold $70.80, but a sustained break under it will put $69.55 on the radar. However, this price is the gateway to a steep decline with a potential target at $64.78 to $61.61.

For now, the path of least resistance remains down, with crude prices struggling to find strong bullish drivers in the current environment.

With the fundamentals bearish at this time, there doesn’t seem to be any urgency to jump in front of support. It is better to wait for your price. The price action inside $70.80 to $69.55 will tell us if there are any buyers out there. If they don’t show up then current longs will liquidate and the selling pressure will increase.