• Oil is falling again and could close below $71.00 this week.
• Traders are assessing what Donald Trump’s victory means as concerns about Chinese demand resurface.
• The U.S. dollar index hit a low after Fed Chairman Powell said he was committed to finishing his term, and is rising ahead of the U.S. trading session.

Crude oil fell more than 1% in the US session on Friday, but remains in the narrow price range where it has been trading for the past four days. Market euphoria following President-elect Donald Trump’s victory appears to be fading as energy markets focus on China, where the prospect of higher U.S. tariffs could continue to further hurt growth in the context of already frail oil demand. This may mean even lower demand than already forecast for 2025.

The US Dollar Index (DXY), which tracks the US dollar’s performance against six other currencies, found support after Federal Reserve (Fed) Chairman Jerome Powell calmed markets. Not only did the Fed cut interest rates by 25 basis points (bps), but Powell also said he wasn’t going anywhere. That could end uncertainty about whether Powell will finish out his remaining two years at the helm of the Fed, after Trump’s victory raised some doubts about Powell’s future.

At the time of writing, crude oil (WTI) was trading at $70.80 and Brent crude was trading at $74.31.

Oil News and Factors Affecting the Market: China Gets Hurt

• Market growth is moderating overall as Trump’s so-called deals take a breather and worries about China prevail, Bloomberg reports.
• Looking back at OPEC crude oil supplies in October, production increased by 370,000 barrels per day. The bulk of the raise is due to a recovery in Libyan production to more than 1 million barrels a day after the resolution of the political crisis over the central bank’s leadership, according to Bloomberg.
• Tropical Storm Rafael is expected to hit the coast of Texas and Louisiana on Saturday, although its impact is expected to remain minor and the center of the tropical storm will not make landfall, Reuters reports.
• The weekly inventory of Baker Hughes US drilling rigs is scheduled to take place at approximately 18:00 GMT. No forecast available, previous count was 479.

Technical analysis of crude oil: A global concern is being created

Oil prices can’t seem to catch a break, which makes sense in this case. Where there are winners, there are losers, and upcoming US tariffs on China pose a problem for oil. High tariffs would mean that China’s exports and economy could face even greater setbacks, leading to less demand for China’s oil in 2025 than already expected.

On the other hand, the next huge hurdle is the high technical level of $74.11, with its 100-day straightforward moving average (SMA) and several key lines. The 200-day SMA at $76.79 is still quite a ways off, although it could be tested if tensions emerge in the Middle East.

The 55-day SMA at $70.81 is still to be considered, although it has lost a lot of strength after being cut during the week. Traders need to look significantly lower at $67.12, the level that supported the price in May and June 2023. If this level is broken, the 2024 YTD low will appear at $64.75 and then $64.38 , i.e. the minimum from 2023.

US WTI Crude Oil: Daily Chart