CL-OIL futures dropped 2.59% to $72.275 per barrel on Tuesday, reversing Monday’s gains after President Donald Trump agreed to a 30-day pause on tariffs against Mexico and Canada, the two largest crude suppliers to the US.
Trump said his administration plans to speak with China, raising the possibility of a potential reprieve on a 10% tariff set to take effect after he delayed levies on Canada and Mexico https://t.co/Z2Vx7fdYK2
— Bloomberg (@business) February 4, 2025
The market initially reacted to the intraday high of $75.16, but the bullish momentum faded as market participants reassessed North American supply risks. The temporary relief from tariffs helped cool off supply fears, leading to a pullback in oil prices.
Despite the pause, uncertainty remains, as Trump’s 10% tariff on Chinese imports still took effect today. The President hinted at potential talks with Beijing, but traders remain cautious about trade relations and global demand.
Image: CL-OIL falls 2.59%, testing support at 71.92 as bearish momentum strengthens, with technical indicators signaling sustained downside risks, as seen on the VT Markets app.
CL-OIL closed at 72.275, marking a 2.59% decline from its opening at 74.197, with a session high of 72.460. The sustained downward movement reflects strong selling pressure, keeping prices near key support levels.
The moving averages (MA 5,10,30) reinforce a bearish outlook, as short-term MAs remain below the longer-term MA, suggesting continued downside momentum. Attempts to recover have been met with resistance, limiting any bullish reversal.
Momentum indicators, particularly the MACD (12,26,9), confirm the bearish sentiment. The MACD line remains below the signal line, while the histogram stays in negative territory, highlighting ongoing weakness. Without clear signs of bullish divergence, selling pressure remains dominant.
Key support is at 71.92, the recent low, while resistance stands at 75.16, a level that previously triggered a sharp rejection. A breakdown below support could accelerate declines, whereas a move above resistance may open the door for a short-term recovery.
While the tariff pause temporarily eases North American supply concerns, broader market focus remains on OPEC’s decision to hold production steady and China’s weakening factory data, which could weigh on demand expectations.
If crude demand from China continues to weaken, CL-OIL may face further downside pressure. However, any signs of OPEC intervention or renewed US-China negotiations could bring bullish reversals. Traders should watch for any updates on Trump’s trade stance and global demand cues for the next price move.
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