Oil, Natural Gas, USD/CAD Technical Analysis: Impact of Tariffs and OPEC+ Decisions

WTI crude oil (CL) prices dropped to $72.50 per barrel, reflecting market uncertainty. The uncertainty stems from heightened pressure from US President Donald Trump, who urged OPEC+ to lower crude prices. Trump’s rationale links reduced oil prices to weakening Russia’s finances and ending the war in Ukraine. Despite Trump’s call, OPEC+ has not responded and remains committed to increasing oil output in April. This situation raises questions about whether oil producers will adjust their strategies to accommodate demands.

Moreover, tensions increased as Trump announced a 25% tariff on Colombian goods, with plans to raise it to 50%. This action followed Colombia’s refusal to allow US military planes carrying deported migrants to land. In response, Colombia retaliated by threatening tariffs on US imports, a significant move given that the US purchases 41% of Colombia’s seaborne crude exports. The White House later announced that Colombia had agreed to Trump’s terms. However, the initial threats underscored the fragility of US-Colombia trade relations. These developments also highlighted the potential impact on oil supply chains, emphasizing the vulnerability of trade ties to geopolitical tensions.

On the other hand, China’s economic struggles continue to weigh on oil demand. January’s Manufacturing Purchasing Managers’ Index (PMI) fell to 49.1 from December’s 50.1, indicating a contraction in factory activity. This weaker-than-expected performance dampens prospects for oil consumption in the world’s largest importer. These developments contribute to a volatile outlook for the global oil market. Brent crude oil (BCO) has dropped to $75.50 as geopolitical and economic challenges persist.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil indicates bearish pressure in the short term. The price decline from $80.73 is contained within a triangle pattern and is moving toward the $68 support level. The price has broken below the 200-day SMA, and the RSI has dropped below the mid-level, signaling further downside potential for WTI crude oil prices. Additionally, the 50-day SMA remains below the 200-day SMA, confirming a bearish trend.

Oil 4-Hour Chart – Bearish Pressure

The 4-hour chart for WTI crude oil shows that the price has reached the black-dotted trendline around $72.50 and initiated a rebound. The red dotted line further reinforces this support level. The RSI has rebounded from the oversold level, indicating that the price may consolidate in the short term. However, the overall trend remains bearish.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Ascending Channel

The daily natural gas (NG) chart shows that the price is trading within an ascending channel. The price consolidation within the orange zone highlights strong volatility. The RSI is positioned at the mid-level, while the 50-day SMA remains above the 200-day SMA. Both SMAs are trending upward, indicating a strong bullish trend. A price correction to the $3.50–$3.60 range may pave the way for another higher-level advance.

Natural Gas 4-Hour Chart – Multiple Ascending Channels

The 4-hour chart for natural gas shows that the price is trading within an ascending channel, indicating positive momentum. This ascending channel provides strong support, around $3.60 and $2.95. The price has already tested the $3.60 level, and a break below this support may lead natural gas to $2.95. However, the trend remains bullish, and this correction could set the stage for higher prices.

USD/CAD Technical Analysis

USD/CAD Daily – Price Consolidation

The daily chart for USD/CAD shows that the pair has broken out of the ascending channel on a broader scale and is consolidating after the breakout. This consolidation has formed a range between $1.4460 and $1.4250. A breakout from this range will determine the pair’s next direction. Since the pair has broken the pivotal zone highlighted by the orange area, it will likely maintain an upward trajectory.

This upward trend is further supported by the decline in oil prices, which weakens the Canadian dollar. As a major oil exporter, Canada relies heavily on oil revenues, which play a critical role in its economy. When oil prices drop, the revenue from oil exports decreases, negatively affecting Canada’s trade balance and economic growth, thereby weakening the Canadian dollar.

USD/CAD 4-Hour Chart – Broadening Wedge

The 4-hour chart for USD/CAD shows that the pair has broken out of the ascending channel but remains elevated. The pair continues to form a symmetrical broadening wedge pattern. Over the past four months, the pair has established a series of bullish price patterns that have lifted USD/CAD. As a result, the next direction for USD/CAD is likely to be higher.