Crude Oil Tests $60 Support on Tariff Concerns

Paul-Rejczak Paul Rejczak May 23, 2025

Crude oil extends downtrend as Trump's tariff threats weigh on markets.

Crude oil closed 0.60% lower on Thursday, extending its short-term downtrend and approaching the key $60 support level. Today, the commodity is down an additional 1.2% in reaction to President Trump's announcement of potential 50% tariffs on European Union goods, adding further pressure to an already weakening market.

For oil markets specifically, these developments are worth monitoring:

  • Oil prices dropped nearly 2% on Friday after President Trump recommended a straight 50% tariff on goods from the EU starting June 1, raising concerns about global economic growth and energy demand.
  • The OPEC+ is holding meetings next week expected to yield another output increase of 411,000 barrels per day for July, adding to previous increases that have already pressured prices. Reuters reports the group could unwind the rest of its 2.2 million bpd voluntary production cut by October.
  • The $60 level remains key support for now, with the next significant support around $58, marked by previous local lows.

 

Crude Oil Tests $60 Support on Tariff Concerns - Image 1

 

Conclusion

Crude oil is testing the crucial $60 support level as multiple headwinds converge: Trump's tariff threats, expected OPEC+ production increases, and broader market concerns about economic growth.

For now, my short-term outlook is neutral.

Here’s the breakdown:

  • Crude oil contracts are extending their downtrend following Trump's latest tariff announcements affecting global trade sentiment.
  • Supply concerns from expected OPEC+ production increases continue to outweigh any geopolitical support.
     

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Thank you.

Paul Rejczak,
Stock Trading Strategist

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