Australian Exchange official website: U.S. crude oil fell slightly, traders alert to market volatility

On Thursday (February 6) in European trading, Brent crude oil and West Texas Intermediate crude oil (WTI) prices fell slightly during the session. On Wednesday, as U.S. crude oil andAUSFOREX official websiteThe increase in gasoline inventories exceeded expectations, indicating weak demand, causing oil prices to plunge by 2%.

In addition, market participants remained cautious about the broader economic impact of a new round of US-China trade tariffs, including levies on energy products. Analysts warned that price volatility would persist as traders assessed the impact of these policy shifts.

Supply and demand factors drive market sentiment

Saudi Aramco sharply raised the price of its March crude for Asian buyers, offsetting a sell-off the previous day and providing some support for the latest price rally, signalling confidence in the world's largest oil exporter and reinforcing expectations of stable demand in the region.

Still, the broader market remains wary of a slowdown in demand. U.S. crude inventories have surged, reflecting weak consumption, while gasoline inventories have also climbed, adding to downward pressure on prices. The demand outlook is further complicated by the uncertainty that China's latest retaliatory tariffs on U.S. crude and liquefied natural gas imports will take effect on February 10.

Some oil and gas traders are now seeking exemptions to get around those tariffs. However, analysts say that while pre-booked shipments may be exempt, new deals will face greater scrutiny. As a result, Chinese refiners like Unipec are likely to pursue other sourcing strategies, including swap transactions with other Asian buyers and increased purchases from the Middle East and Russia.

Market Outlook: Despite Short-Term Stability, Oil Remains at Bearish Risk

While technical support provides temporary stability, the fundamental backdrop remains bearish. Rising U.S. inventories, signs of weak demand, and the potential drag from U.S.-China trade tensions could limit any upside potential in the near term.

As geopolitical risks and supply-demand imbalances continue to influence price movements, market participants should be prepared for increased volatility.

technical analysis

WTI Crude Oil Hourly Chart

Looking at the hourly chart, prices rose above the 200-hour moving average on Monday, but failed to maintain the momentum. The 100-hour moving average has been a resistance level for most of yesterday and today, and the market is bearish. The price low has moved down to yesterday's low of $70.64, and today's low reached $70.66.

Looking ahead, as long as the price is below the 200-hour moving average of $73.15, sellers still have more dominance. The price needs to break above the 100-hour moving average ($72.69) and then break through the 200-hour moving average to reduce the bearish trend.

On the downside, the next target is $70.64. If it falls below this level, it will open up more downside space.

At 23:12 Beijing time, WTI crude oil was quoted at $70.82 per barrel, down 0.30%.