08 Apr 2025

WTI experiences a modest increase as renewed selling of the USD benefits commodities priced in USD. However, worries that US tariffs could trigger a global recession and reduce fuel demand may limit the rise in oil prices. Additionally, an unexpected increase in supply from OPEC+ necessitates caution before making aggressive bullish investments.

On Tuesday, West Texas Intermediate (WTI) crude oil prices attracted some buyers following the volatile price movements caused by US tariffs the previous day. Currently, prices are trading just below the mid-$61.00 range, reflecting an increase of over 1% for the day.

The US Dollar (USD) is facing new selling pressure, halting a two-day recovery from a multi-month low. This is driven by expectations that a slowdown in the US economy, prompted by tariffs, may compel the Federal Reserve (Fed) to resume its cycle of rate cuts soon. Such developments are perceived to benefit commodities priced in USD, providing some support to crude oil prices. Additionally, the recent uptick may be linked to a technical rebound following a significant decline to levels not seen since early 2021, which occurred on Monday.

Nevertheless, a substantial recovery appears unlikely due to escalating fears that President Donald Trump's extensive reciprocal tariffs could instigate a full-scale global trade war, thereby diminishing fuel demand. Furthermore, a surprising decision by eight OPEC+ members to advance a planned production increase, adding 411,000 barrels per day to the market in May, has raised concerns about oversupply. This situation may further limit potential gains in crude oil prices.

Looking forward, attention in the market will now turn to the publication of the FOMC meeting minutes scheduled for Wednesday. This will be succeeded by the release of the US Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday. Additionally, developments related to trade are expected to significantly impact USD price movements and offer support to Crude Oil prices.