Key Points:
- CL-OIL (WTI crude) trades around $66.60 after briefly rising above $67.
- US imposes fresh sanctions targeting Iranian oil exports.
- IEA warns of increasing supply surplus and weaker demand outlook.
WTI Supported by Fresh US Sanctions
CL-OIL (WTI crude oil) futures edged up slightly to around $66.60 per barrel on Friday, recovering marginally after dropping more than 1% previously.
Prices received some support following new US sanctions against Iran, targeting its oil minister, Mohsen Paknejad and Hong Kong-flagged vessels reportedly aiding Iranian crude exports. This geopolitical tension offered temporary support, preventing prices from extending further declines.
Technical Analysis
Picture: Crude oil struggles near 66.60 as bearish pressure persists, with key resistance at 67.00, as seen on the VT Markets app.
CL-OIL closed at 66.600, slightly higher than its open at 66.492, after reaching a high of 66.610 and dipping to 66.375. Despite a 0.16% upward trend, the price action suggests uncertainty, with resistance near 67.925 and support holding at 66.355.
The moving averages (MA 5,10,30) indicate a weak recovery, as short-term MAs remain below the long-term trend. Meanwhile, the MACD (12,26,9) remains in bearish territory, though the histogram is stabilizing, suggesting a potential shift in sentiment.
Oil markets remain pressured—a breakout above 67.00 could drive bullish momentum, while a decline below 66.35 may reinforce selling pressure.
Demand Outlook Pressured by Economic Concerns
Despite the modest recovery, market confidence remains fragile due to growing macroeconomic worries. The International Energy Agency (IEA) recently cautioned about a widening oil surplus, exacerbated by trade tensions and rising production from OPEC+ countries.
According to the IEA, global oil supply will surpass demand by about 600,000 barrels per day in 2024, primarily due to strong US output growth. Demand is expected to rise by just 1.03 million barrels per day, revised down by 70,000 barrels from previous estimates.
This oversupply scenario may weigh on prices, leading CL-OIL to potentially extend losses unless demand conditions improve.
Market Outlook
Market participants are advised to closely watch the ongoing developments concerning Iran and US sanctions, which could prompt short-term price movements.
Nevertheless, the broader sentiment remains under pressure due to the prevailing global demand concerns flagged by the IEA. Traders should remain cautious, keeping an eye on key support and resistance levels.
