Oil News: Crude Futures Dive on Trump Tariffs and Weakening Oil Demand Outlook

WTI Plunges Below Key Fibonacci Support at $59.91

WTI crude oil futures sank sharply on Friday, breaching critical Fibonacci support at $59.91 and settling at $58.90 — the lowest close since June 4. The breakdown reflects intensifying bearish momentum, with downside potential extending to the late May bottom at $55.74 if selling persists into Monday.

While a recovery above $59.91 could signal a technical rebound, traders remain cautious given the broader bearish structure. Resistance looms at the 50-day moving average of $62.90 and the 200-day moving average of $63.00, both capping upside attempts. The recent bearish crossover, where the 50-day slipped below the 200-day, further underscores the fragile technical setup.

Trump’s China Tariff Threat Sparks Global Demand Fears

Oil’s sharp sell-off was largely driven by risk-off sentiment after U.S. President Donald Trump threatened a “massive” tariff increase on Chinese goods. The announcement intensified concerns over global demand, sending both Brent and WTI futures tumbling more than 3%.

Brent crude settled at $62.73, down $2.49 on the day, its lowest level since May 5. UBS analyst Giovanni Staunovo pointed to Trump’s trade threats as the primary catalyst behind the drop, while others cited a combination of factors exacerbating downside pressure.

OPEC Production and Gaza Ceasefire Shift Focus to Supply-Side Risks

Market sentiment was also weighed down by rising crude supply from OPEC and continued output growth across the Americas. The recent Gaza ceasefire agreement, ratified by Israel on Friday, has reduced geopolitical risk premiums, particularly those tied to Middle East tensions.

As a result, traders are turning their attention back to the anticipated supply glut. While OPEC+ agreed to a smaller-than-expected production increase on Sunday, analysts note that expectations of a sharp supply ramp-up have yet to materialize into substantially lower prices.

U.S. Political Risk and China Trade Tensions Deepen Bearish Tone

Broader concerns are adding pressure to crude markets. Traders are closely monitoring the potential for a prolonged U.S. government shutdown, which could weigh on domestic demand. In parallel, China’s expanded export controls on rare earth elements — viewed as a counter to U.S. trade pressure — may escalate tensions ahead of any prospective talks between Trump and Chinese President Xi Jinping.

Oil Prices Forecast: Technical and Fundamental Weakness Point to Further Downside

With WTI crude now trading below key Fibonacci support and facing structural resistance at both the 50- and 200-day moving averages, the technical outlook remains bearish.

Add to this the demand-side headwinds from trade tensions, rising supplies, and easing geopolitical risks, and the near-term oil prices forecast skews to the downside. Unless prices can reclaim $59.91 and hold above it, traders should prepare for a potential retest of the May low at $55.74.

More Information in our Economic Calendar.