Today’s market comment on behalf of Dilin Wu Research Strategist at Pepperstone
22nd January 2025
Currently, the oil market is facing strong selling pressure, with Brent crude futures closing lower for four consecutive trading days, now dropping below $80.
From the supply side, Trump’s declaration of a national energy emergency and his push for energy independence have been significant drivers of bearish momentum. His policies could potentially turn the U.S. into a net energy exporter, which would have lasting implications for global oil prices. This is especially true considering OPEC+’s ongoing pressure to increase production, which could lead to prolonged suppression of price levels. However, any moves by the U.S. to restore or even increase export levels, or to secure new trade agreements with key oil producers, could provide upward momentum for prices.
From the demand side, the global economic slowdown and the uncertain economic recovery path in China may limit price increases in the medium to long term.
In the short term, the direction of the Trump administration’s policies may play a dominant role in the oil market’s trajectory. As more details emerge regarding energy production and trade agreements, traders will assess the balance between economic growth, energy security, and policy risks. Given the unchanged expectation of oversupply in the oil market, crude oil will continue to face pressure. The reaction of Brent futures around the 200-day moving average and near the $75.8 level will be worth monitoring.