Oil prices slide as WTI nears multi-year lows

David Morrison

SENIOR MARKET ANALYST

01 May 2025

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Crude oil dropped sharply this morning, extending its consecutive run of losses to four days. Front-month WTI has dropped 13% from the highs hit Wednesday last week, when prices were closing in on $65 per barrel.

This morning’s sell-off has taken WTI back within sight of the multi-year low hit at the beginning of April. This was when the front-month contract broke $55 to hit its lowest level in over four years. Despite this, crude is only moderately oversold.

The daily, weekly and monthly MACDs are all turning south again, suggesting that the path of least resistance points down. The fundamental outlook remains negative for prices. The global demand growth outlook was weak even before President Trump began his trade war.

US light crude oil on a candlestick chart approaching a support level on a downtrend

Source: TradingView

Chinese demand was falling as the country struggled to deal with the implosion of its property market. Now it has to deal with Trump’s tariffs which have effectively ended trade between the US and China.

Meanwhile, it sounds as if OPEC+ is in no mood to step in to support the oil price. Quite the contrary, as the group is anxious to unwind the production cuts which did so much to support the oil price over the past couple of years.

Add in yesterday’s grim US GDP data, and the outlook for oil prices doesn’t look good. But it’s also worth remembering that nothing moves in a straight line forever. And often a blow-off top, or bottom, is the first signal that a turnaround is coming.

Is crude there yet? It’s too early to tell, and there have been so many mixed signals recently that the market has become difficult to trade. But as the saying goes, the cure for low oil prices is low oil prices.


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