Oil Tariff Problems – Breaking Lower From a Sideways Range?

In a previous post on Oil from December 9th (please take a look at our timeline for details) we highlighted that prices were back to an interesting level on the chart. Tests of an uptrend, which had been forming since the September 10th low at 65.63, were being seen as a sideways range in price developed.

It was suggested at the time that traders may be watching this support level, as closing breaks below it might expose a more extended phase of price weakness, or if the support held, upside pressures might emerge once more. As we now know, the support level remained intact and a strong price rally was seen up to 81.01, the January 15th session high.

However, as impressive as the December/January Oil price strength proved to be, after trading to the 81.01 January 15th highs, there was an equally significant failure of upside momentum, as sellers materialised again. This saw a sharp decline in Oil prices, all the way down to 67.11 the latest correction low posted on March 4th.

Now, this last move lower has been in response to concerns about the demand outlook for Oil across the rest of 2025 as President Trump’s tariffs on key trading partners Canada, Mexico and China took effect and were met by retaliatory tariffs back on US goods.

The fear is that an escalation of trade wars will negatively impact the global economy, and the ensuring slowdown will see the demand for Oil reduce.

Whether it does or not remains to be seen, but Oil prices may remain volatile across the rest of this week as traders receive more tariff updates and start to focus on key US economic data in the form of the US ISM Services PMI, released tomorrow at 1500 GMT, and then the all important US Non-farm Payrolls, which is released at 1330 GMT on Friday.

Technical Focus:



What is now interesting with the chart above, is that Tuesday is seeing breaks under the support offered by the uptrend, which if confirmed on a closing basis, may in turn suggest the possibility of a more extended phase of Oil price weakness.

This type of break lower in price is no guarantee of further declines and much will depend on future price sentiment and trends, but if it does happen, being aware of possible support levels, can be helpful.

Technical Update: Potential Oil Price Downside Focus



Previous correction lows are often a good place to start, as they have held declines before and seen prices rally, so are potentially areas where buyers maybe found again. With this in mind, 66.75, the November 18th low, or even 65.63, which was the September 10th low, may well be worth watching as possible support levels.

Now, if these lower supports do give way on a closing basis, it’s not out of the question from a longer term perspective that there could be potential for an even deeper decline. If this is the case, as highlighted on the chart above, it might prove to be 63.68, which was the May 2023 low, or even 61.91, which was the November 2021 low that could in time come into focus.

What if the Support Holds?

Now, with so much uncertainty, it is possible that these support levels hold, so having some potential resistance levels to consider if there is a bounce can also be useful.

Half of this week’s sell-off stands at 68.84, which if broken to the upside may suggest greater risks for continued Oil price strength. However, as recently proved to be the case when the market recovered into the 68.47 February 20th price high, it was the declining Bollinger mid-average that limited and then reversed the rally back to the downside.



So, it could be this mid-average, which currently stands at 70.95, that traders might feel is a more challenging resistance area to overcome. Certainly, it would need to be broken on an upside closing basis, before evidence might turn towards a more extended retracement of January/March price declines.

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