Oil prices are making attempts at recovery from their lowest levels since September 2024.
However, this rebound is unlikely to be sustained in the near term. Investors remain concerned about the potential economic consequences of tariffs imposed by Donald Trump and their impact on fuel demand. At the same time, OPEC+ has confirmed plans to increase oil production starting in April, which is also exerting significant pressure on crude prices.
However, the downside for oil prices may be limited due to Trump's warning about potential new sanctions against Russia if the war in Ukraine does not cease.
According to Reuters, the U.S. is also considering easing sanctions on Russia's energy sector if Moscow agrees to end hostilities in Ukraine. This has created market uncertainty, impacting oil price movements.
Additionally, a weaker-than-expected U.S. jobs report, released on Friday, has strengthened expectations that the Federal Reserve will cut interest rates multiple times this year. This has kept the U.S. dollar near its lowest levels since November, which could provide tailwinds for commodity prices denominated in dollars, potentially helping to limit losses in crude oil prices.
Market Outlook
Overall, the oil market remains tense, and investors should closely monitor sanctions-related developments and political news.
Technical Analysis
Despite the recent decline in oil prices, traders should note that the RSI (Relative Strength Index) is approaching oversold territory, while the MACD indicator has halted its decline. Given these signals, bears should be cautious about opening new short positions and instead wait for a short-term consolidation or temporary rebound before making further moves.
