WTI Tests Key Support Levels as Buyers Step In

West Texas Intermediate crude oil futures are inching higher on Tuesday after buyers came in following a test of a short-term 50% level at $58.52. This price was slightly above the 50-day moving average at $58.27, which is both support and the short-term trend indicator.

Following the successful test of the support, another round of buyers came in to push the market through the short-term pivot at $58.93, which is new support.

At 12:16 GMT, March WTI Crude Oil futures are trading $59.84, up $0.50 or +0.84%.

Bulls Target $60.00 to $60.96 Resistance Zone

On the upside, the first target is a 50% level at $59.80. Overcoming this level could create the upside momentum needed to challenge the 200-day moving average at $60.49 and the 61.8% retracement level at $60.96. The latter is the last defense before the $62.20 main top.

Mixed Signals: Trump’s Tariffs vs. China’s Economic Strength

The news was mixed overnight, but it was just enough to steady the price action. Traders continued to assess the potential impact of President Trump’s new tariffs on European countries that were not supporting his quest for Greenland, but stronger-than-expected economic data from China helped steady prices. This news helped put in a floor, while giving prices a little boost. The market was also underpinned by an upward revision of the 2026 global economic growth estimate by the International Monetary Fund and stronger diesel prices.

Today’s steady but subdued price action suggests a brewing conflict between the impact of Trump’s newly proposed tariffs and stronger-than-expected economic data. Trump ignited the possibility of a trade war by threatening additional 10% levies from February 1 on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain.

China’s GDP Data Lifts Global Demand Sentiment

However, this potentially negative news was offset by positive news from China in the form of better-than-expected fourth-quarter gross domestic product data on Monday. IG market analyst Tony Sycamore summed it up by saying, “The resilience in the world’s top oil importer provided a lift to demand sentiment.”

Supply Glut and Iran Tensions Define Long-Term Outlook

Looking ahead, the longer-term outlook remains bearish because of an ongoing global supply glut. This is helping to cap gains along with the 200-day moving average at $60.49. Creating a floor along with the 50-day moving average at $58.27 is the war premium in place due to the violence in Iran that could lead to a bullish supply disruption if conditions escalate.

Look for the range-bound trade to continue over the near-term as long as the market stays inside the range created by the 50-day moving average and the 200-day moving average. Fundamentally, the Iran situation will provide support and could lead to an upside breakout if Trump takes military action against the rogue nation. Capping gains will be the supply glut, which may or may not disappear in 2027.

More Information in our Economic Calendar.