WTI Oil Price Volatility: Trump’s Executive Orders Redraw the Energy Landscape
President Donald Trump issued a series of executive orders just a few days into his term. The West Texas Intermediate (WTI) crude oil market saw substantial volatility as it reacted to such orders. The WTI steadied near $76.20 on Friday, closing a three-day losing streak as the market considered Trump’s energy agenda. The key measures entailed a 25% tariff on imported oil from Canada, raising apprehension over increased cost for exports for Canada. Restrictions placed by the former President, Joe Biden, on drilling within the Arctic region and along US coasts were lifted. “Drill, baby, drill” policies under Trump meant expedited permits for energy projects and would focus on domestic production at any cost. Uncertainty over tariffs on Chinese imports also added to market turbulence, and traders became cautious of potential impacts on global demand. These developments go a long way in highlighting the wide-ranging implications of Trump’s policies on the global energy market and domestic oil production. KEY LOOKOUTS • WTI crude oil prices stabilized at $76.20, ending a losing streak, as markets reacted to Trump’s energy and trade policies impacting global oil dynamics. • Trump’s proposed 25% tariffs on Canadian crude imports may increase the cost for Canadian exporters and push WTI prices up, changing the dynamics of US-Canada oil trade relations. • Trump rolled back Biden-era restrictions on Arctic and coastline oil drilling, focusing on a policy shift to maximize US domestic energy production and reduce reliance on imports. • The silence of Trump on tariffs for China, the world’s largest oil importer, leaves markets uncertain about potential demand impacts, which contributes to oil price volatility. The WTI crude oil market witnessed significant fluctuations as traders assessed the impact of President Donald Trump’s sweeping executive orders on energy and trade. Prices firmed up to $76.20 after a three-day fall on hopes that President Donald Trump’s suggestion to place a 25% tariff on Canadian crude imports will increase costs for Canada’s oil exports and drive US market prices higher. Additionally, the rollback of restrictions placed by Biden on oil drilling by lifting bans in the Arctic and US coastlines signaled a significant shift towards boosting domestic production under his “drill, baby, drill” agenda. However, uncertainty remained as Trump did not announce specific tariffs on China, the largest oil importer, leaving global markets cautious about potential demand impacts. These developments underscore the volatility and far-reaching implications of Trump’s energy policies on both domestic and international markets. The WTI crude oil market steadied at $76.20 following the executive orders from Trump, reshaping energy policies. Key measures include Canadian oil tariffs and reversing drilling restrictions, sparking global market volatility. • WTI crude oil steadied at $76.20 after significant market volatility triggered by Trump’s energy and trade policies. • Trump proposed 25% tariffs on Canadian crude imports, raising export costs and potentially driving WTI prices higher. • Trump repealed Biden-era restrictions on Arctic and coastal oil drilling, prioritizing increased domestic energy production. • Plans to expedite permitting processes for oil, gas, and power projects aim to maximize US energy output. • Trump refrained from specifying tariffs on China, creating uncertainty about global oil demand impacts. • Trump’s agenda reflects a shift toward domestic production and reduced reliance on imports, reshaping US energy strategies. • Traders are still very cautious due to the potential risks of supply chains and global crude oil prices associated with Trump’s executive orders. West Texas Intermediate Crude Oil: The WTI crude oil market stabilized around $76.20, breaking a three-day losing streak amidst heightened volatility sparked by President Donald Trump’s executive orders. One of the key measures was a proposed 25% tariff on Canadian crude imports, which was seen to raise costs for Canada’s oil exports, potentially driving WTI prices higher. Canada, being one of the major crude oil exporters to the US, faces significant trade implications as these tariffs disrupt long-standing trade dynamics. Additionally, Trump refrained from announcing specific tariffs on China, the world’s largest oil importer, adding to the market’s uncertainty about global demand impacts. WTI Daily Price Chart. Source: TradingView, Prepared By ELLYANA In a sharp policy shift, Trump reversed Biden-era restrictions on oil drilling in the Arctic and along US coastlines, reflecting a commitment to boosting domestic energy production. The other decisions made by his administration were on the expediting of permitting process for oil, gas, and power projects so that US energy production would increase. These policies have been part of Trump’s “drill, baby, drill” policy, showing how he aims for energy independence with less dependence on imports. In analyzing the long-run effects of such policies, traders are wary of the risks and opportunities that come with the shifting global oil landscape. TECHNICAL ANALYSIS WTI crude oil prices are stabilizing near $76.20 after breaking out of a three-day downward trend, potentially consolidating in a broader range. Prices are hovering around the 50-day moving average on the daily chart, meaning it is an important support zone. The momentum indicators are neutral at about 50 using the Relative Strength Index (RSI). A break above the resistance level recently observed at $77.50 will likely ignite positive momentum towards $79.00. Failure to hold above support at $75.50 will create a door ajar for retesting the level of $74.00. Market participants are focusing their attention on the geopolitical situations and tariff announcements as they might heavily influence price movements in the near term. FORECAST If WTI crude oil prices break above the $77.50 resistance level, bullish sentiment regarding decreased Canadian crude imports on proposed tariffs will likely push prices higher. The reversal of drilling restrictions and accelerated permitting processes in the US are likely to drive optimism about increased domestic production capacity, which will also be positive for market sentiment. Geopolitical uncertainties, including potential disruptions in global supply chains, may push oil prices toward the $79.00 to $80.00 range in the near term. Failure to hold at the $75.50 support level could also set off a selloff down to the $74.00 mark, with higher U.S. production under Trump’s