WTI Crude Oil Falls to $73.32 as U.S. Inventories Rise, Tariffs Loom
Oil prices edged lower early Wednesday following reports of a one-million-barrel increase in U.S. crude inventories, adding pressure to an already volatile market.
West Texas Intermediate (WTI) crude for March delivery fell $0.45 to $73.32 per barrel, while Brent crude declined $0.48 to $77.01 per barrel.
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The American Petroleum Institute (API) reported the inventory build was below analyst expectations of a 3.7-million-barrel increase, suggesting some underlying strength in demand. However, traders remain cautious ahead of official data from the Energy Information Administration (EIA), which could confirm or challenge API’s report.
Beyond inventory data, geopolitical and trade tensions are also weighing on oil prices, with markets closely watching potential new tariffs on Canadian oil imports.
Trump’s Tariff Threats Raise Market Uncertainty
President Donald Trump’s proposed 25% tariff on Canadian imports, set to take effect February 1, is adding uncertainty to oil markets. Canada supplies over four million barrels per day to the United States, primarily to refiners reliant on oil sands heavy crude.
The tariff could increase costs for U.S. refiners, potentially tightening domestic supply.
Market uncertainty remains as Trump has not confirmed any exemptions for Canadian crude imports.
The tariff decision could impact WTI-Brent price spreads, influencing broader market sentiment.
Industry analysts at PVM Oil Associates warn that upcoming tariff decisions and Brent contract expirations will create volatile trading conditions, making oil markets particularly sensitive to policy changes.
OPEC+ to Review Output Policy Next Week
Looking ahead, OPEC+ ministers are scheduled to meet Monday, with discussions expected to focus on gradually reversing production cuts. The group had agreed to return 2.2 million barrels per day of voluntary cuts, starting with 122,000 bpd increases from April.
Traders will closely monitor OPEC+ statements for any signs of output adjustments, particularly given the current demand outlook and potential tariff-driven market disruptions.
WTI Crude Oil Technical Outlook
Technically, WTI crude remains in a downward channel on the 4-hour chart, trading at $73.57. The 50-day EMA at $74.75 acts as strong resistance, capping any bullish attempts.
Immediate Resistance: $74.29 – A breakout above could lead to a test of $75.91.
Immediate Support: $72.47 – A drop below this level could push prices toward $70.91.
As long as WTI remains below $74.75, the bearish outlook persists. A breakout above $74.29 could shift momentum, but downside risks remain dominant for now.
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