Trump vs OPEC: Oil Prices Take a Hit as Pressure Mounts

Oil prices fell on Monday after U.S. President Donald Trump urged the Organization of the Petroleum Exporting Countries (OPEC) to lower prices, citing the need to weaken Russia’s finances and accelerate an end to the Ukraine war.

Trump’s call comes as his administration rolls out extensive measures to ramp up U.S. oil and gas production in a bid to capture a larger share of the global market.

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On Friday, Trump reiterated his stance, stating, “One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil… That war will stop right away.” He further threatened to impose tariffs and sanctions on Russia and other OPEC nations if no progress is made toward resolving the Ukraine conflict.

Market analysts suggest that these statements have introduced additional volatility, with the prospect of increased U.S. crude production potentially exerting downward pressure on prices. Despite Trump’s remarks, OPEC+ has yet to announce any changes to its planned production hikes set to begin in April.

Market Reaction and Expert Analysis

Both WTI and Brent crude benchmarks posted their first weekly losses in over a month as fears of supply disruptions due to Russian sanctions eased. Analysts at Goldman Sachs believe that Russian production will likely remain stable due to higher freight rates attracting non-sanctioned vessels to transport Russian oil. They argue that Western policymakers will prioritize maximizing discounts on Russian oil rather than focusing on reducing supply.

However, JP Morgan analysts suggest that geopolitical risks remain significant, noting that nearly 20% of the global Aframax fleet, which transports crude oil, is currently under sanctions. “The application of sanctions on Russia’s energy sector as leverage in future negotiations could have unpredictable effects,” the analysts noted.

Meanwhile, the U.S. government walked back its plans to impose tariffs and sanctions on Colombia after the South American nation agreed to accept deported migrants. This move relieved concerns about disruptions in Colombian oil exports to the U.S., which accounted for 41% of the country’s seaborne crude shipments last year.

WTI Crude Oil Technical Analysis

WTI crude oil is trading at $74.06, marking a modest 0.39% uptick. However, the commodity remains in a well-established downward channel, struggling to break above key resistance levels.

Oil Prices Chart - Source: Tradingview
Oil Prices Chart – Source: Tradingview

Key technical levels to watch:

  • Immediate resistance: $74.86, coinciding with the upper boundary of the descending channel. A breakout could lead to further upside toward $76.92.
  • Immediate support: $72.85, followed by critical levels at $71.61 and $70.15, which could see further declines if breached.
  • 50 EMA: Currently at $75.68, acting as a dynamic resistance level, reinforcing the bearish sentiment.

Overall, WTI’s bearish trend remains intact unless a breakout above the $74.86 resistance occurs, which could signal a potential trend reversal.

Key Takeaways:

  • Trump’s push for lower oil prices adds pressure on OPEC and creates market volatility.
  • Analysts remain divided on the long-term impact of sanctions on Russian oil production.
  • WTI crude continues its downtrend, with support at $72.85 and resistance at $74.86.
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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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