WTI crude oil futures slipped below $74 per barrel on Monday, snapping a five-session rally. The decline comes as the U.S. dollar hovers near a two-year high, adding pressure to the dollar-denominated commodity. A stronger greenback typically makes oil more expensive for holders of other currencies, reducing demand.
Traders are now eyeing a series of U.S. economic data releases this week, including the highly anticipated December nonfarm payrolls report, which could provide further clarity on the Federal Reserve’s interest rate trajectory.
WTI crude rose nearly 5% last week, supported by several bullish factors. A key driving factor was China’s anticipated stimulus efforts. As the world’s top oil importer, China’s plans of rolling out further stimulus measures to bolster its slowing economy could offer a boost in demand for crude.
Picture: Crude oil steadies near 73.61, consolidating below 74.37 resistance as bullish momentum moderates, as seen on the VT Markets app.
Crude oil rose 0.74% to close at 73.61, after reaching a session high of 74.37. However, a potential pause in its upward momentum might be around the bend, as hinted by the converging moving averages.
Crude’s recovery comes as recession fears ease and optimism grows around potential OPEC+ production adjustments. However, earlier in the week, weaker-than-expected global demand data kept gains in check. With mixed signals in the market, traders are treading carefully, keeping a close eye on upcoming inventory reports and demand forecasts to gauge the next move.
Despite crude’s recent surge, a decline in Iran’s oil production and exports is forecasted by the second quarter of 2025.
The drop is attributed to tighter sanctions and expected policy changes under President-elect Donald Trump’s administration. A reduction in Iranian supply could provide some support for crude prices, particularly if global demand picks up in the latter half of the year.
If the dollar remains strong, oil prices may face continued headwinds. However, any signs of improving demand from China or tighter supply conditions—such as reductions in Iranian exports—could provide upside momentum as the year progresses.
Official partners:
