Crude Falls Midweek

Oil prices are attempting to stabilise today following a collapse to new YTD lows yesterday. Crude futures plunged around 3.6% on the day as fresh tariff uncertainty weighed on sentiment and traders mulled the prospect of a Russia-Ukraine peace deal. The latest US data yesterday added further downside pressure with consumer confidence seen deteriorating last month, stoking fears that Trump’s policy actions are negatively impacting US economic prospects.

Trade War

Trump’s renewed hostility on trade, threatening to push ahead with planned delayed tariffs on Canada and Mexico next week, has unnerved markets. We’ve seen a broader sell off in risk assets which has hit oil prices accordingly and looks likely to keep crude pressured near-term.

Russia-Ukraine Peace Prospects

News that Ukraine has agreed to sign a mineral deal with the US has been taken as a sign that progress is being made towards achieving a peace deal between Russia and Ukraine. The prospect of UN peacekeepers being deployed to Ukraine has been floated as a potential option, which Putin has reportedly shown openness too. Any further insights, or headlines reflecting continued progress, should keep oil pressured lower as traders eye reduced supply risks going forward.

EIA On Watch

Looking ahead today, traders will be watching the latest update from the EIA. With inventories having risen for two straight weeks, rising by almost 5 million barrels last time, another surplus today will be firmly bearish for crude through the back end of the week.

Technical Views

Crude

The recent failure at the 72.61 level has seen the market turning lower again with price now just above the 67.45 support. This is a major support zone for the market which bulls need to defend to prevent fresh downside momentum entering the market. Back above 72.61, 77.64 will be the initial bull objective.