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    Oil Prices Drop After Trump’s Call for Lower Costs

    January 24, 2025

    Key Points

    • WTI crude futures closed at $74.43, with an intraday low of $74.00, down from an opening of $75.38.
    • Trump’s call for lower oil prices adds pressure on OPEC to reconsider output policies.
    • Bearish technical indicators suggest further downside risks in the near term.

    Oil futures extended losses in early trading after U.S. President Donald Trump stated at the World Economic Forum in Davos that he plans to urge Saudi Arabia and OPEC to lower crude prices. The comments, reminiscent of his previous term’s tactics, weighed on market sentiment and contributed to a decline in crude prices.

    WTI crude futures dropped to an intraday low of $74.00, before closing at $74.43, marking a significant pullback from the session high of $74.59, as traders priced in potential OPEC policy adjustments. Brent crude futures followed a similar trend, reflecting broader market concerns over supply management.

    Trump’s statements have sparked concerns among traders, with expectations rising that OPEC could face diplomatic pressure to increase production.

    See also: Dollar Dips Again Amidst Tariff Uncertainty

    Market participants are also considering the impact of rising U.S. crude stockpiles and global economic shifts, which could further suppress oil prices.

    Technical Outlook Points to Further Weakness

    The technical picture suggests ongoing bearish momentum, with immediate support seen at $74.00. A breach below this level could lead to further declines toward $73.50.

    Picture: Crude oil prices hold support near $74.00 after recent drop, as seen on the VT Markets app.

    On the upside, key resistance stands at $74.75, with a stronger barrier at $75.50, which aligns with the recent trendline resistance. The bearish crossover on the MACD indicates persistent downside pressure, reinforcing the bearish outlook.

    Market Outlook

    The oil market remains on edge as traders await further statements from OPEC and key economic data releases that could shape price direction.

    Any confirmation of increased production by OPEC could lower prices, while a firm stance on maintaining current supply levels might provide temporary support.

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