Oil Prices Resume Downtrend, as WTI Crude Slips 1.5% Despite EIA Draw
WTI and Brent oil prices remain on a downward trajectory, shaped by global trade shifts, policy actions, and technical market barriers.
Quick overview
- Crude oil prices are experiencing volatility due to global trade shifts and geopolitical uncertainties.
- After a brief recovery, WTI crude is facing resistance at its 50-day moving average, limiting further gains.
- Recent U.S. inventory data showed unexpected drawdowns, indicating stronger demand, but market sentiment remains cautious.
- A U.S. court ruling on tariffs adds complexity to the trade landscape, contributing to the uncertain outlook for crude prices.
Live USOIL Chart
WTI and Brent oil prices remain on a downward trajectory, shaped by global trade shifts, policy actions, and technical market barriers.
Crude Oil Tries to Rebound, but Faces Heavy Resistance
After bottoming out in early April, crude oil benchmarks have managed a partial recovery—but continue to encounter persistent selling pressure. West Texas Intermediate (WTI) crude had previously plunged to around $55 per barrel, while Brent crude dropped near $58.50, as the commodity complex absorbed the shock of widespread trade sanctions and tariff escalation.
WTI Crude Oil Chart Daily – The 50 SMA Capped the Upside
Prices temporarily stabilized thanks to a technical support zone at those April lows. Momentum improved modestly as signs of progress in US-China trade talks began to emerge, helping Brent rise above $66 and WTI push toward $63. However, market sentiment remained cautious, and that hesitancy reasserted itself when WTI encountered resistance at its 50-day simple moving average (SMA), halting the rally in its tracks.
Hopes Tempered by Geopolitical Uncertainty
While initial signs of compromise in tariff negotiations sparked a brief bounce in risk assets—including crude—the overall mood in the market remains pessimistic. Investors are still wary of how ongoing geopolitical shifts might impact global demand for energy and industrial commodities.
The rally lost momentum as the complex web of sectoral tariffs—particularly on semiconductors, steel, aluminum, and automobiles—remained firmly in place. Though the broader market had priced in some optimism, that sentiment has faded in the absence of clear resolution.
U.S. Inventory Data and Crude Price Reaction (May 29, 2025)
Crude Oil Inventories:
- A surprise drawdown of -2.795 million barrels was reported, compared to expectations of a build of +0.118 million barrels, signaling stronger-than-expected demand or tighter supply dynamics.
Gasoline Inventories:
- Inventories fell by -2.441 million barrels, significantly more than the anticipated draw of -0.527 million barrels, suggesting solid seasonal consumption, likely tied to early summer travel demand.
Distillate Inventories (including diesel and heating oil):
- Fell -0.724 million barrels, contrary to forecasts for a +0.481 million barrel build, indicating continued industrial and freight-related demand.
Cushing, Oklahoma (Delivery Hub for WTI Futures):
- Recorded a modest build of +0.075 million barrels, defying expectations for a drawdown of -0.457 million barrels, hinting at localized supply accumulation.
Crude Price Action & Technical Setup
- WTI Crude is currently trading at $61.16, down $0.69 or -1.12% on the day.
- Intraday Low: $60.57
- Intraday High: $63.04
From a technical analysis perspective: Brent Retrace Higher Is Complete
Price has slipped below both the 100-hour ($61.51) and 200-hour ($61.61) moving averages, which could indicate weakening short-term momentum. The failure to hold above these key averages may open the door for further selling pressure unless buyers re-enter on stronger macro or demand cues.
Court Ruling Adds Fresh Layer of Complexity
The day’s most notable headline came not from the oil pits but from a U.S. courtroom. The U.S. Court of International Trade overnight halted President Trump’s proposed reciprocal tariffs, casting further uncertainty over the trade landscape. While European markets were largely closed and trading remained subdued, this legal development added to the cautious tone in commodity markets.
Though some viewed the pause in new tariffs as a potential catalyst for stability, others saw it as a temporary legal disruption that does little to address the underlying tension in global trade.
Crude Futures Retreat, Facing Technical Headwinds
WTI crude futures ended the session at $60.90 per barrel, marking a daily decline of $1 or approximately 1.5%. Sellers returned aggressively as the contract failed to hold above technical support levels. With WTI now trading below both the 100-hour and 200-hour moving averages—currently near $61.51 and $61.61 respectively—the short-term trend has turned neutral-to-bearish.
This price action reflects broader concerns about demand outlooks and the lack of clarity on global trade flows, particularly for energy exports.
Conclusion: Fragile Rebound Faces Uncertain Future
While oil markets have managed to rebound from their spring lows, sustained upside appears elusive. Technical resistance, unresolved trade tensions, and policy volatility continue to challenge bullish momentum. Unless there is a decisive shift in trade policy or a clear resolution to geopolitical disputes, crude prices may remain range-bound and vulnerable to renewed selling pressure. The path forward, for now, looks as murky as the headlines driving it.
US WTI Crude Oil Live Chart
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