NextFin news, On Friday, October 10, 2025, crude oil futures experienced a significant drop, with West Texas Intermediate (WTI) crude settling at $58.90 per barrel, marking its lowest close since June 4. This decline followed a breach of a key technical Fibonacci support level at $59.91, signaling intensified bearish momentum in the oil market.
The sharp sell-off was primarily triggered by U.S. President Donald Trump’s threat to impose "massive" tariffs on Chinese imports, escalating fears of a slowdown in global economic growth and oil demand. Brent crude futures also fell, closing at $62.73 per barrel, their lowest since early May.
Market analysts, including UBS’s Giovanni Staunovo, identified the tariff threats as the main catalyst behind the price drop, while other factors such as increased crude supply from OPEC and continued output growth in the Americas added to the downward pressure.
Geopolitical risks, which had previously supported oil prices, diminished following the ratification of a ceasefire agreement in Gaza by Israel on Friday, reducing Middle East-related supply concerns.
Technically, the oil market faces resistance at the 50-day and 200-day moving averages, around $62.90 and $63.00 respectively, with a recent bearish crossover where the 50-day average fell below the 200-day average, reinforcing the fragile outlook.
Additional market pressures include the potential for a prolonged U.S. government shutdown, which could dampen domestic oil demand, and escalating U.S.-China trade tensions, highlighted by China’s expanded export controls on rare earth elements as a countermeasure to U.S. tariffs.
Unless WTI crude prices recover above the $59.91 support level, analysts warn of a possible retest of the May low near $55.74 per barrel, indicating further downside risk in the near term.
This development comes amid broader market uncertainty, with investors closely monitoring geopolitical events, trade policies, and supply-demand dynamics that continue to shape the global oil landscape.
Source: FXEmpire, article by James Hyerczyk, published October 12, 2025.
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