Oil prices are heading for their first monthly decline since November, pressured by uncertainty over global economic growth and volatile fuel demand. Geopolitical tensions and ongoing trade disputes have dampened investor sentiment, overshadowing supply concerns. In addition, rising jobless claims and slowing economic growth in the United States have heightened fears of slowing demand.
OPEC+ faces challenges in deciding whether to increase production or maintain current levels amid changing supply dynamics. Meanwhile, market analysts note that oil prices find technical support between $65 and $70 per barrel. The complex geopolitical landscape continues to shape the energy market’s near-term outlook.
Natural gas is trading at $3.92, showing a slight gain of 0.08%, but the outlook remains cautious. The price is hovering below the pivot point at $3.99, a critical level that may dictate the next move. If the NG breaks through the $3.99 level, it could spark buying interest, which could push prices towards the next resistance at $4.09, followed by a stronger barrier at $4.23.
On the downside, there is spot support at $3.75, with a more substantial ground at $3.55. If prices fall below $3.75, selling pressure could intensify. The 50-day Exponential Moving Average (EMA) at $3.99 acts as resistance, keeping the bearish bias intact. The trend remains bearish below $3.99, but a crucial breakout above this level could shift momentum to bulls.
USOIL is trading at $69.93, recording marginal gains on the four-hour timeframe. The $70.08 pivot point defines the immediate directional parameter. Support is set at $69.21, with subsequent support at $68.34.
Oil prices fall weekly on economic concerns
Crude oil prices were on track to post their first weekly loss in a month, driven by concerns about the U.S. economy, tariffs, and the prospect of peace in Ukraine.
At the time of writing, Brent crude was trading at $73.66 per barrel, with West Texas Intermediate at $69.97 per barrel.
Besides the above bearish factors, according to Reuters, some fear that OPEC+ will go ahead with easing its production cut scheduled for April, although the separate report quoted unnamed sources as saying the group was hesitant about the move in light of price movements.
The sources told Reuters that OPEC+ was watching Trump and waiting to see the consequences of peace talks with Russia, the return of maximum pressure on Iran’s oil exports and, more recently, the cancellation of the Chevron exemption to do business in Venezuela, which will affect the country’s exports as well. Chevron exported about 240,000 barrels of Venezuelan crude to the United States per day thanks to the waiver. The company also had big plans for its operations in Venezuela, with the aim of boosting exports from just one of them, Petrobyar, by up to 50% this year, to a total of 143,000 barrels per day.
Concern about the U.S. economy weighing on oil prices this week was sparked by the Bureau of Economic Analysis’ second estimate of GDP for the fourth quarter of 2024, which indicated a slowdown from 3.1% in the third quarter to 2.3% in the fourth quarter. For the full year 2024, growth in the world’s largest economy was estimated at 2.8%.
“Those who weigh on the downside, particularly U.S. tariff measures, are currently winning,” BMI analysts said in a note quoted by Reuters.
Oil prices fall under pressure from new economic concerns
Oil prices fell on Friday, heading towards their first monthly decline since November, as uncertainty over global economic growth and fuel demand outweighed Washington’s tariff threats and further signs of a U.S. economic slowdown on supply concerns.
The most active Brent crude futures for May fell 31 cents, or 0.4%, to $73.26 a barrel, while U.S. West Texas Intermediate crude futures were at $70.04 a barrel, down 31 cents, or 0.4%. Brent the older month that ends later on Friday was trading at $73.69, down 35 cents, or 0.5%.
Both benchmarks are heading for their first monthly decline in three months.
Tony Sycamore, an IG market analyst, said a long list of factors including fears of an economic slowdown in the US, tariffs, OPEC+ plans to increase supply in April, and hopes for peace in Ukraine, are curbing investors’ risk appetite and lowering prices.
“The only counterarguments are that the price has already fallen a lot,” he said, adding that WTI is well backed between $65 and $70 per barrel based on technical charts.
U.S. President Donald Trump said on Thursday that proposed 25% tariffs on Mexican and Canadian goods would take effect on March 4, along with additional 10% tariffs on Chinese imports.
Economists at Fitch’s BMI research unit said market participants were struggling to gauge the impact of the Trump administration’s barrage of energy policy announcements this month.
“Those who weigh on the downside, particularly the US tariff measures, are currently winning,” BMI said in a note.
Data showing U.S. jobless claims jumped more than expected in the previous week also weighed on investor sentiment, while another government report confirmed that economic growth slowed in the fourth quarter.
