Oil Slips as Market Weighs Supply Risks and Weak Demand Outlook
West Texas Intermediate (WTI) crude futures dipped around 2% on Tuesday, trading near $71 per barrel after breaching a key technical level. The decline accelerated after prices fell below the 100-day moving average of $71.51.
The drop threatens to break oil's first weekly gain in a month. Supply uncertainty, including expectations of an OPEC+ production increase delay and a drone attack on Kazakh pipeline flows, had previously supported prices.
However, uncertainties surrounding demand and long-term inflation have dimmed the outlook. President Donald Trump's trade policies and other decisions have cast a shadow on economic growth and consumer sentiment.
Analysts at Citigroup expect OPEC+ to postpone its planned 120,000 barrel-per-day output hike for a fourth time. The alliance aims to restore 2.2 million barrels per day by April, but current market conditions suggest a delay.
"With prices in the mid-$70s, we anticipate that OPEC+ will postpone the return of withheld supply," Citigroup analysts said. "A decision to increase production may only occur if the US intensifies sanctions pressure on Iran amid negotiations."