Oil News: Can OPEC+ and Trade Tariffs Reverse Crude Oil’s Bearish Trend?

Why Did Crude Oil Prices Slide This Week?

Crude oil prices faced strong bearish pressure this week as a combination of rising U.S. stockpiles, weaker global demand signals, and trade tariff concerns weighed on the market. Both Brent and WTI crude benchmarks posted weekly losses, with WTI closing down nearly 3.0% as traders reacted to economic uncertainties and shifting geopolitical risks​.

Last week, Light Crude Oil Futures settled at $72.53, down $2.13 or -2.85%.

Did Rising U.S. Crude Inventories Weaken Market Sentiment?

Yes, U.S. crude stockpiles increased significantly this week, signaling weaker demand and pushing prices lower. The American Petroleum Institute (API) reported a build in crude and gasoline inventories, with official Energy Information Administration (EIA) data later confirming a 3.5 million barrel rise​. This unexpected surplus came as refinery run rates slowed due to winter storms, further dampening near-term demand​.

At the same time, OPEC+ remains committed to planned production increases beginning in April, ensuring steady supply despite softening demand projections. The combination of rising inventories and expectations of additional output added to bearish sentiment​.

How Did Trump’s Tariff Threats Impact Oil Prices?

President Donald Trump’s announcement of potential 25% tariffs on Canadian and Mexican imports injected volatility into the market. Canada and Mexico are the two largest crude suppliers to the U.S., and any trade disruptions could significantly impact North American crude flows​.

The uncertainty surrounding whether crude oil will be included in these tariffs has kept traders on edge. If tariffs are imposed, U.S. crude prices could initially rise due to supply chain disruptions, but longer-term economic effects could dampen demand. Analysts suggest that a full-scale tariff on oil imports could further complicate refinery economics and lead to a restructuring of crude trade flows​.

Did China’s Economic Slowdown Worsen the Bearish Outlook?

Yes. China, the world’s largest oil importer, posted weaker-than-expected manufacturing data this week, raising fresh concerns over global energy demand. The country’s official purchasing managers’ index (PMI) fell to 49.1, its lowest level in five months, signaling a slowdown in industrial activity​.

Adding to the pressure, independent Chinese refineries are struggling with tighter government policies and U.S. sanctions on Russian crude, reducing their ability to refine and consume crude oil at previous levels​. This decline in demand from China, coupled with increased U.S. supply, created a strongly bearish backdrop for oil prices this week.

What’s the Market Forecast for Next Week?

The crude oil market remains under bearish pressure heading into next week, but volatility is expected. Several key factors will shape price action:

Trump’s Tariff Decision – If crude oil is included in the U.S. tariffs on Canada and Mexico, it could provide short-term bullish support for U.S. oil prices. However, broader economic consequences may eventually lead to weaker demand​.

OPEC+ Meeting on February 3 – The producer group will discuss its output strategy amid geopolitical uncertainties. Any signal of increased production from Saudi Arabia or its allies could push prices lower​.

Technical Support Levels – WTI crude is getting close to testing a key support zone at $70.80 to $69.55. A break below these levels could trigger stop-loss selling and accelerate the downward trend​.

Overall, the market bias remains bearish, but geopolitical risks and trade policy shifts could introduce sharp price swings. Traders should stay cautious and watch for developments in tariffs and OPEC+ decisions.

More Information in our Energy Information Administration (EIA) data.