Oil, Natural Gas, USD/CAD Analysis: Volatility Ahead as Prices Approach Critical Levels

Oil prices remain under pressure as investors anticipate progress in Russia-Ukraine peace talks. WTI crude oil (CL) trades near a two-month low of $68.60, reflecting weakened demand expectations. The White House has signaled President Trump’s intention to end the conflict quickly, with a potential meeting between Trump and Russian President Vladimir Putin. The US and Ukraine have also agreed to a draft minerals deal that excludes security guarantees or continued arms supply. Traders view this as a positive step toward de-escalation, which could lead to the removal of sanctions on Russia. If sanctions ease, the Russian oil supply could increase, further depressing global oil prices.

Moreover, the concerns over a potential economic slowdown caused by Trump’s tariff policies add further downside pressure. The US has already imposed a 10% tariff on Chinese imports and 25% duties on aluminum and steel. Additional reciprocal tariffs, including 25% levies on foreign cars, pharmaceuticals, and semiconductors, are expected by April. These trade restrictions could weaken global economic activity, reducing industrial demand for oil. Investors fear slower economic growth may curb energy consumption, leading to an oversupplied oil market. Therefore, sentiment in the oil market remains bearish, with traders hesitant to take long positions.