WTI crude drops to $71.50 as US-China tariff war escalates
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West Texas Intermediate (WTI) crude oil extended its decline for a second consecutive session, trading near $71.50 per barrel on Tuesday. Market sentiment deteriorated after China retaliated against US tariffs, raising fears of a prolonged trade war between the world’s two largest economies.
China Hits US Energy Exports with New Tariffs
China’s Commerce Ministry announced a 15% tariff on US coal and liquefied natural gas (LNG), along with an additional 10% levy on crude oil, farm equipment, and certain automobiles. These measures, effective February 10, come in response to Washington’s 10% import tax on Chinese goods. Additionally, China has tightened export controls on strategic metals, including tungsten, tellurium, ruthenium, and molybdenum, citing national security concerns. These restrictions could disrupt global supply chains, adding further pressure to commodity markets.
OPEC+ Maintains Output Plan Amid Market Uncertainty
Meanwhile, OPEC+ confirmed its commitment to gradually increase oil production starting in April, despite heightened geopolitical risks. The decision follows renewed calls from President Trump for lower oil prices, arguing that high energy costs benefit Russia amid the ongoing Ukraine conflict. Adding to the market shift, OPEC+ has officially removed the US Energy Information Administration (EIA) from its list of monitoring sources, further signaling tensions between the cartel and US energy policy.
Market Outlook: WTI Faces Key Support at $70
With WTI crude now testing the $71.50 level, further downside could see a drop toward the psychological $70 support zone. A breakdown below this level may accelerate selling pressure, exposing $68.80 as the next key support. Conversely, a rebound would require a move above $73.00, with stronger resistance at $74.50 if bullish sentiment returns.
Volatility Ahead as Trade Talks Continue
Markets remain on edge as President Trump is expected to speak with China within 24 hours, warning of "very, very substantial" tariffs if negotiations fail. With energy exports now caught in the crossfire, oil price volatility is set to persist, with traders closely watching further developments in the escalating US-China trade dispute.
China Hits US Energy Exports with New Tariffs
China’s Commerce Ministry announced a 15% tariff on US coal and liquefied natural gas (LNG), along with an additional 10% levy on crude oil, farm equipment, and certain automobiles. These measures, effective February 10, come in response to Washington’s 10% import tax on Chinese goods. Additionally, China has tightened export controls on strategic metals, including tungsten, tellurium, ruthenium, and molybdenum, citing national security concerns. These restrictions could disrupt global supply chains, adding further pressure to commodity markets.
OPEC+ Maintains Output Plan Amid Market Uncertainty
Meanwhile, OPEC+ confirmed its commitment to gradually increase oil production starting in April, despite heightened geopolitical risks. The decision follows renewed calls from President Trump for lower oil prices, arguing that high energy costs benefit Russia amid the ongoing Ukraine conflict. Adding to the market shift, OPEC+ has officially removed the US Energy Information Administration (EIA) from its list of monitoring sources, further signaling tensions between the cartel and US energy policy.
Market Outlook: WTI Faces Key Support at $70
With WTI crude now testing the $71.50 level, further downside could see a drop toward the psychological $70 support zone. A breakdown below this level may accelerate selling pressure, exposing $68.80 as the next key support. Conversely, a rebound would require a move above $73.00, with stronger resistance at $74.50 if bullish sentiment returns.
Volatility Ahead as Trade Talks Continue
Markets remain on edge as President Trump is expected to speak with China within 24 hours, warning of "very, very substantial" tariffs if negotiations fail. With energy exports now caught in the crossfire, oil price volatility is set to persist, with traders closely watching further developments in the escalating US-China trade dispute.