Crude Oil Week Ahead: As price spikes on oil remain short lived, the broader bearish impact of tariffs is supporting oil prices through their bearish trajectory, with possible alterations to OPEC forecasts and monthly reports in 2025.
By : Razan Hilal, CMT, Market Analyst
Key Events to Watch:
- Chinese CPI, PPI, and new loan data
- Trump tariff negotiations (Monday or Tuesday)
- Fed Chair Powell’s testimony on semiannual monetary policy
- US CPI and FOMC member insights
Chinese Data vs. Tariff Risks
China’s short-term economic boost may have ended as the trade war with the US intensifies. Initial tariff headlines caused brief price spikes, but their broader economic impact remains contractionary, reducing oil demand potential. Chinese inflation for January is expected to rise due to pre-tariff economic activity and export boosts, while new loans remain uncertain amid heightened risks and US rivalry. However, given China’s strong innovation-driven economy, resilience against US headwinds can be expected.
US Economic Data vs. Tariff Risks
US non-farm payrolls fell to 143K, below the 169K forecast, while unemployment dropped to an eight-month low of 4.0%, leaving markets uncertain. Key indicators between next week’s US CPI and Powell’s testimony will shape inflation expectations and their impact on economic growth and crude oil demand. However, with Trump advocating lower prices and high production, a bearish outlook dominates US crude markets.
Click the website link below to read our exclusive Guide to oil trading in 2025
OPEC Monthly Report vs. Tariff Risks
OPEC’s January 2025 report maintained a 1.4M barrel demand projection, with 0.1M from OECD nations and 1.3M from non-OECD. However, ongoing tariff and trade war risks may lead to downward revisions. Tariffs increase costs, slow economic growth, and disrupt supply chains, while geopolitical tensions and potential trade retaliation could cause short-term price spikes. Nonetheless, the overall bearish trend persists.
Technical Analysis: Quantifying Uncertainties
Crude Oil Week Ahead: 3-Day Time Frame – Log Scale
Source: Tradingview
With tariff headlines shifting towards negotiations, oil briefly spiked above $72 before retreating toward the key support between $70 and $69.5. Bearish momentum remains dominant, and a close below $69.5 could extend losses toward $66, $64, $60, and $55. On the upside, short-lived spikes may occur as oil approaches a four-year support zone dating back to December 2021, with key resistance levels at $72, $76, and $80.
Written by Razan Hilal, CMT
Follow on X: u/Rh_waves
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.