Oil Prices: April Could Be the Worst Month in Three and a Half Years
As the XTI/USD chart shows:
at the beginning of April, WTI crude was trading above $71 per barrel;
this morning, on the last day of the month, the price has fallen below $60.
The overall decline may reach 16% the worst monthly performance since November 2021.
Why Is Oil Falling?
The primary driver behind the sharp drop in oil prices earlier this month was the introduction of new US tariffs, particularly targeting China and the EU. This raised concerns that a potential global trade war could slow economic growth and, in turn, reduce global oil demand.
According to a Reuters poll, the tariffs imposed by Trump have made a global recession in 2025 a realistic risk.
In addition, growing attention is being paid to OPEC+ and its plans to increase oil production. The next meeting is scheduled for 5 May.
Technical Analysis of the XTI/USD Chart
Oil price fluctuations in 2025 have formed a descending channel (highlighted in red), with lower highs and lower lows reflecting continued bearish sentiment.
Bulls may hope for support to emerge around the $58.85 level, as:
this has acted as support before (as indicated by arrows);
this level aligns with the lower boundary of a local upward trend (shown in blue), which formed after news broke that Trump had postponed the implementation of some tariffs triggering a sharp rebound in oil prices from the 9 April low.
Nevertheless, the broader structure remains bearish: the rise towards point C appears to be a corrective recovery following the impulse drop from A to B. Given the potential impact of upcoming news including statements from the White House and OPEC+ decisions a bearish breakout below the blue channel cannot be ruled out.
Read more: https://fxopen.com/blog/en/oa-oil-prices-april-could-be-the-worst-month-in-three-and-a-half-years/
Text source: Forex Trading Blog
