Oil Prices Plummet as Trade Tensions Rise

Oil prices took a hit after Trump's tariffs were announced, and it's essential to understand the reasoning behind this drop.

When US imposed tariffs on Chinese goods, China retaliated by placing tariffs on US goods, including oil. This move led to a decrease in oil demand from China, which is the world's largest oil importer. As a result, oil prices plummeted.

◉ Key Factors Behind the Decline
● Trade Tensions: The escalation of trade tensions between the US and China led to a decrease in oil demand, causing prices to drop.
● China's Tariffs on US Oil: China's decision to impose tariffs on US oil imports reduced demand for US oil, contributing to the price decline.
● Global Economic Slowdown: The ongoing trade tensions and tariffs have led to a slowdown in global economic growth, further reducing oil demand and prices.
● Increased Oil Production: The US has been increasing its oil production, leading to a surplus in the market and contributing to the decline in oil prices.

◉ Technical Observations
● A notable decline in oil prices has been observed since mid-January 2025.
● Prices are currently hovering near the critical support zone around $66, a level that has historically provided a floor for prices.
● If this support level is breached, it may trigger a further decline in oil prices.

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