Insights 
VT 
WTI crude oil has slipped below $62.00 per barrel. Rising supply levels, as reported by the Energy Information Administration (EIA), are placing pressure on prices.
Oil prices have faced challenges since Donald Trump took office, due to recession concerns, increased global supply, and a weaker US Dollar. During late last year, prices were supported by post-pandemic demand and constrained supply.
Trump Administration Impact
Under the Trump administration, policies aimed at boosting domestic oil production and easing environmental regulations altered expectations for supply growth. As a result, the supply outlook shifted as mid-2025 approached.
The EIA’s recent report indicated a larger-than-expected increase in crude inventories, suggesting potential demand weakness. This has added to fears of oversupply, causing further declines in WTI prices, now under $62 per barrel.
Geopolitical risks, such as potential conflicts involving US-Iran, continue to affect prices. Recent tensions in the Middle East hinted at risk premiums, but the market remains focused on supply imbalances.
Technically, WTI tried to breach the 38.2% Fibonacci level at $64.179 but faced resistance. The $64.00 mark remains key, while the 10-day SMA at $61.68 offers support, with the next support level at $60.58.
With West Texas Intermediate dipping under the $62 threshold, we’re watching a sharp shift that stems not only from the expected patterns of inventory shifts but something more stubborn—structures in physical supply chains aligning unfavourably against demand. It’s not just the raw figures from the EIA; it’s the broader interpretation: refiners aren’t drawing as much, and storage levels are telling us that barrels simply aren’t moving the way they once did. This speaks to patterns of consumption that may be flattening, despite past hopes of post-COVID recovery momentum.
Inventory and Demand Dynamics
The previous spike in demand that had given prices some liftoff late last year has weakened. Temporary strength was driven more by constrained output than from robust downstream pull. That support eroded quickly once domestic production began climbing with less regulatory pushback. Trump’s deregulatory approach meant shale operators had fewer hurdles to clear—production scaled, wells restarted, export terminals revived. The market had initially underpriced this response, but now supply growth is front and centre.
Inventories climbing faster than seasonal averages reflect not just the presence of supply but the absence of demand resilience. The EIA isn’t just releasing data—it’s shaping short-term sentiment. A build of this size goes beyond a simple oil cycle. It flags reduced industrial usage, softer travel expectations, and refiner hesitation. With prices already under stress, this kind of accumulation punctures bullish attempts at clutching retracements.
Technically, we watched the attempt toward that 38.2% line around $64.18 fade away. That area had mattered—not for any mystical reason—but because enough traders watched it closely. But when that many bids fail to clear resistance, we’re not looking at conviction. We’re now leaning against a 10-day average that sits closer to $61.68, and if that doesn’t hold, there’s not much standing between here and another test around $60.58. Price memory from previous consolidations won’t stop a slide on their own.
There’s also persistent pricing tension linked to political noise, particularly involving Iranian relations, which tends to inject uncertainty into buying decisions. Still, in this environment, even friction between states failed to trigger durable upward moves. Any potential supply shocks are drowned out by the sheer weight of domestic output climbing and international producers unwilling to cut quotas in any convincing way.
For traders in derivative markets, the path here diverges sharply depending on whether positioning leans purely technical or is tethered more to the fundamentals mapped by agencies like the EIA. Shorter-duration contracts may continue pressing downward as inventories build, especially if gasoline demand doesn’t pick up seasonally. Rolling positions too aggressively into mid-curve exposures may face sharp re-pricing should economic data deteriorate further—GDP and consumer data in the next fortnight should not be ignored.
We’ve adjusted our weariness on near-dated resistance levels accordingly. There’s no expectation for fundamentals to reset unless external catalysts strike. For now, pressure remains biased to the downside, particularly if macro signals—like dollar movement or global manufacturing—don’t provide relief.
