West Texas Intermediate (WTI) crude oil prices fell below the $58.00 mark during the Asian session on Friday, experiencing more than a 0.80% decline for the day. Fresh selling pressure arose due to concerns over increased global supplies, driven by US plans to control Venezuelan oil.<\/p>\n
US government data showed a 3.8 million-barrel decrease in inventories, marking the largest drop since October. However, expectations of increased global supplies from Venezuelan oil prevented further price increases.<\/p>\n
US President Trump has plans to control the Venezuelan oil industry, aiming for a $50 per barrel target price. This involves managing Venezuela\u2019s state-run oil company, potentially increasing global oil supply.<\/p>\n
The recent rally in the US Dollar has also influenced WTI prices, as a stronger USD impacts oil’s affordability. Traders are closely anticipating the US Nonfarm Payrolls report, which may impact Federal Reserve rate expectations and oil market dynamics.<\/p>\n
WTI oil is known for its high quality, sourced in the US, and is a key benchmark in the oil market. Its price is influenced by global supply-demand dynamics, geopolitical events, and the US Dollar’s value.<\/p>\n
We should be cautious as WTI crude oil prices show signs of weakness. We recall the rejection near the 50-day moving average last year when prices were near $58, a technical signal that often precedes a downturn. This historical resistance level suggests that any rallies may face significant selling pressure in the coming weeks.<\/p>\n
Concerns about oversupply, which we saw emerge in 2025 with plans to bring more Venezuelan oil to the market, are now becoming a reality. Following the easing of sanctions, recent tanker tracking data shows Venezuelan exports have climbed back above 850,000 barrels per day, adding to global inventories. This is happening while OPEC+ holds its production cuts steady, creating a tense balance in the supply picture.<\/p>\n
On the demand side, the outlook remains uncertain and is a key factor for us to watch. The latest reports from the International Energy Agency (IEA) forecast a slowdown in global demand growth for 2026, citing weakening economic activity in major economies like China. This contrasts with the large inventory draws we saw at times last year, suggesting the demand picture has softened considerably.<\/p>\n
The direction of the US dollar will be critical, as it was throughout 2025. The market is currently pricing in a high probability of two Federal Reserve interest rate cuts before July, especially after the latest inflation data showed core CPI moderating to 3.4%. A weaker dollar resulting from these potential cuts could provide some support for oil prices, acting as a counterbalance to the bearish supply and demand fundamentals.<\/p>\n
Given these conflicting signals, we see heightened volatility as the most likely outcome. This environment suggests that using options to define risk, such as buying puts to hedge long positions or establishing straddles to play a significant price move in either direction, would be a prudent strategy. Simply holding a directional futures position carries significant risk until a clearer trend emerges.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI crude falls below $58 on supply concerns, Venezuelan oil control plans, and strong US Dollar.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38690","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38690","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38690"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38690\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}