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WTI crude oil (CL) prices gained momentum and approached $69.60 in early Thursday trading. This rally followed US President Donald Trump’s announcement of a 25% tariff on countries buying oil from Venezuela. This move raised concerns about reduced global supply and boosted oil prices to a near four-week high.
Moreover, falling U.S. crude inventories added to the bullish sentiment. The EIA reported a 3.341 million barrel drop in stockpiles last week, far exceeding expectations. This was the largest decline in 13 weeks. The unexpected drawdown reinforced the view of tightening supply and supported further gains in oil prices. Furthermore, the crude stocks at the Cushing, Oklahoma, delivery hub also dropped by 0.755 million barrels.
However, the broader term trend remains bearish and therefore the upside may be limited. A ceasefire agreement between Russia and Ukraine over maritime and energy targets eased some global supply fears. The US also moved to relax select sanctions on Moscow, potentially balancing the recent supply concerns triggered by the Venezuela-related tariff decision.
WTI Crude Oil (CL) Technical Analysis
The daily chart for WTI crude oil shows that the price is rebounding from the long-term support at $66. However, the 50-day SMA remains downward trending, indicating a bearish trend. Strong resistance lies between the $70 to $72.50 area, and the price is likely to move lower from this resistance zone.
