Crude oil futures are under pressure due to tariffs, and there is a risk of falling to the $60 support level

Oil futures softened in European trading on Thursday as traders kept a close eye on the technical pivot of $69.89, an important level at which price volatility is key to market sentiment.

If the price can continue to break through this level, it could start a rally, targeting resistance levels around $77.09 and $77.64.

Trump's tariff pressure and sanctions against Russia have exacerbated uncertainty in the crude oil market

Crude oil prices came under pressure as traders assessed the supply fallout from former President Donald Trump's call for immediate tariffs on Russia and its trading partners. Mr. Trump promised to impose secondary tariffs of 100 per cent unless progress was made in Ukraine talks within 10-12 days, ahead of a previously announced 50-day deadline.

Analysts are wary of fully factoring in the threat given Mr. Trump's history of capriciousness on trade policy. Still, if the rhetoric translates into action, the risk of a reduction in Russian crude exports remains. Adding insult to injury, the US Treasury imposed new sanctions on more than 115 Iran-linked entities, highlighting the tightening pressure on major oil producers.

Crude oil inventories rose, while gasoline inventories fell, indicating resilient demand

US crude inventories unexpectedly rose by 7.70 million barrels to 426.70 million last week, in sharp contrast to analysts' expectations of a decline of 1.30 million barrels. The unexpected increase was due to lower exports. However, gasoline inventories fell by 2.70 million barrels, much more than expected, indicating continued strong domestic driving demand.

According to Fujitsu Securities, the data presented a mixed picture - positive for refined products but negative for crude oil - with traders viewing the overall results as broadly neutral for the crude oil market.

The Federal Reserve is holding its fire, but dissent hints that it could pivot in September

The Federal Reserve held interest rates steady at 4.25-4.5 per cent, but two governors dissented in favour of a rate cut - a rare occurrence. Chairperson Jerome Powell clarified that no decision had been made on the September meeting, disappointing traders who had expected a higher probability of a rate cut.

3% GDP growth and moderated inflation (2.1% overall and 2.5% core) provided the basis for easing. However, Powell stressed vigilance against inflation, especially given the risks associated with tariffs. The likelihood of a September rate cut fell from 64% to 46% following the announcement, and financial conditions tightened slightly.

Outlook: Cautiously bearish below $69.89, major macro risks remain

(WTI crude oil daily chart, source: Internet)

Crude's technical hesitation at $69.89, combined with rising geopolitical and policy headwinds - from Trump's tariff threats to mixed signals from the Federal Reserve - suggest a cautiously bearish short-term outlook. Unless the bulls regain and hold this pivot, further declines to mid-$ 60 support are highly likely.

At 19:37 Beijing time, WTI crude oil was reported at $69.65/barrel, down 0.50%.