WTI Crashes 16%—$59 Breakdown Has Traders on Edge

WTI crude (USOIL) has plunged to $59.66, marking its sharpest month-to-month decline since 2021. April alone noticed a 16% drop in WTI and a 15% fall in Brent, because the oil market buckled below the load of renewed geopolitical tensions and mounting financial headwinds.

The quick catalyst? A full-scale U.S.-China commerce conflict, reignited by President Donald Trump’s April 2 tariff announcement. China responded with retaliatory measures, intensifying considerations over international demand destruction. The end result: a broad risk-off sentiment throughout commodities.

Including to the strain, U.S. client confidence has tumbled to a five-year low, and China’s manufacturing unit output is shrinking at its quickest tempo in 16 months. In accordance with ANZ strategist Daniel Hynes, early indicators of demand resilience had been seemingly pushed by pre-tariff stockpiling—a short lived increase that’s now reversing.

Rising Provide Amplifies the Bear Case

It’s not simply demand that’s weighing on oil. Provide-side pressures are compounding the selloff. Final week, the American Petroleum Institute (API) reported a 3.8 million barrel construct in U.S. crude inventories, reinforcing fears of oversupply.

To make issues worse, OPEC+ is reportedly contemplating an output hike at its Could 5 assembly, a transfer that might flood the market additional simply as demand falters.

Though Trump’s current easing of auto tariffs has supplied a glimmer of reduction, analysts warning that political efforts to curb inflation by preserving gasoline costs low might proceed to strain oil costs within the brief time period.

Technical Breakdown: WTI Slides into Bear Territory

From a technical perspective, WTI’s clear break beneath $60.35 confirms bearish momentum. The following help sits at $59.19, a crucial degree that, if breached, might speed up draw back strain.