Are Tariffs About to Slam the Brakes on Oil Demand?

WTI crude came under heavy selling pressure Thursday after the U.S. rolled out a sweeping tariff package that sparked immediate fears of slower global growth and weaker oil demand. Traders weren’t reacting to the direct impact on crude—oil and refined products were excluded—but to the ripple effect across the broader economy.

A 10% minimum import tariff on nearly all goods landed like a hammer. It raised the prospect of retaliatory moves, costlier trade, and softer consumption—all red flags for fuel demand. The market didn’t wait for the dust to settle. Selling accelerated fast as the macro story flipped from geopolitical risk to economic drag. The shift in sentiment was sharp and decisive, and for now, it’s demand—not supply—that’s dominating positioning.

UBS wasted no time, trimming its crude outlook by $3 per barrel on concerns that tariffs could dent global consumption more than previously expected. Several desks echoed the call, noting the real risk is not immediate disruption but a hit to industrial activity and consumer strength in key importing economies.

Did OPEC+ Just Undermine Its Own Market Management Strategy?

If the tariff shock rattled demand expectations, OPEC+ added a fresh layer of bearishness with its surprise decision to accelerate output increases. Ministers announced plans to return 411,000 barrels per day to the market in May—tripling the volume traders had been pricing in just days earlier.

This was a curveball. The market had assumed OPEC+ would stick to its measured pace. Instead, the group leaned into supply, likely driven by internal politics and pushback from members like Kazakhstan. Whatever the motive, the message to the market was clear: OPEC+ is not holding back barrels to offset macro risk.

For traders, this complicates the near-term outlook. The assumption that OPEC+ would provide a stabilizing force through limited supply discipline is now in question. With additional barrels on the way and demand under threat, the supply-demand balance has clearly shifted. The downside now has more room to run unless there’s a sharp pivot.

Are Inventory Builds Confirming Demand Is Already Softening?

EIA’s latest weekly report offered no relief. U.S. crude stocks surged by 6.2 million barrels, catching the market off guard. That build wasn’t isolated either—API data earlier in the week had flagged the same trend. And while gasoline saw a modest draw, distillates barely moved, hinting at weak downstream activity.

This isn’t just a data point—it’s a signal. The size of the crude build implies either lower refinery demand or rising domestic output, neither of which supports a bullish stance. The drawdown expectations didn’t materialize, and instead, the data confirmed that the physical market is not as tight as hoped.

For traders, this undercuts one of the few supportive narratives left. If U.S. demand is stalling at the same time as supply is set to increase and tariffs start dragging on the global economy, the risk balance isn’t neutral anymore—it’s tilted firmly lower.

Is the Russian Supply Story Still Driving Headlines or Just Noise?

There was renewed talk of U.S. secondary sanctions on buyers of Russian oil this week, with the former president threatening to impose tariffs of 25% to 50% on those who continue purchasing. But market reaction was muted. India continues to source a significant share of its crude from Russia, though its officials insist all purchases remain compliant with existing sanctions. China, meanwhile, has already pulled back in prior sanction cycles, and state firms appear to be operating with caution.

Without clear enforcement or new restrictions, these headlines aren’t moving the needle. Traders are still tracking the situation, but absent concrete action, it remains background noise compared to the more pressing macro and inventory developments.

Weekly Light Crude Oil Futures

Trend Indicator Analysis

The main trend is up according to the weekly swing chart, however, momentum is trending lower with the market trading on the bearish side of the 52-week moving average at $70.49.

Crossing to the strong side of the pivot at $69.31 will be a sign of buying, but traders still face headwinds at the 52-week moving average at $70.49, a pivot at $70.57 and a key 50% level at $72.11.

Overcoming the 52-week moving average will shift momentum and could trigger an acceleration to the upside. We did see a little of that earlier in the week when the market soared past a $72.11 pivot to $72.28. However, heavy selling pressure following this move drove prices back below the moving average.

The dip back below $69.31 is a sign of selling pressure, but strong support appears to have been established at a series of bottoms at $65.01, $64.54 and $61.37.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending April 11 is likely to be determined by trader reaction to $69.31.

Bullish Scenario

A sustained move over $69.31 will signal the presence of strong buyers. If this creates enough near-term momentum, we could see a possible retest of $70.49 to $70.57.

Bullish traders need to watch the reaction to the 52-week moving average at $70.49. Overtaking it with conviction could lead to the start of a strong uptrend.

Bearish Scenario

A sustained move under $69.31 will indicate the presence of sellers. The first downside target is a support zone at $65.01 to $64.54. The major support is $61.37.

Overall, we’re still looking at a range bound trade, dominated by “sell the rally” mentality. The current price action late in the week suggests the “buy the dip” strategy will be tested next week.

Oil Prices Forecast: Bearish Fundamentals Dominate the Near-Term View

The tone across the oil market has changed rapidly. What began as a technically-driven rally just days ago has turned into a broad-based sell-off. Tariffs have cast a long shadow over the demand outlook. OPEC+ has stepped up supply at exactly the wrong moment. And inventory data from the U.S. is flashing warning signs about the health of domestic consumption.

There’s still plenty of headline risk—geopolitics haven’t gone away—but right now the market is being driven by fundamentals. And those fundamentals are turning more bearish by the day. Traders are adjusting fast, pulling risk and repositioning as macro pressures build.

The near-term view leans bearish. Demand concerns are now front and center, with supply adding pressure rather than providing support. Unless something material changes—either from policymakers or the physical market—expect downside pressure to persist.

Technically speaking, it’s pretty clear that traders are locked in on “sell the rally” mode, but the real question is whether the “buy the dip” strategy will re-emerge.

What’s also pretty clear is that there is no upside potential until the market closes over the 52-week moving average, currently at $70.49. This resistance fits in nicely with the “sell the rally” mentality.

The addition of the OPEC+ event raises major questions about whether $65.01 will hold as support next week. This puts $61.37 back on the radar.