Oil markets face mixed signals as supply and demand dynamics shift
WTI crude holds near $67 as traders weigh supply increases and demand uncertainty
Oil prices continue to see fluctuations, with WTI crude oil remaining steady at around $67 per barrel as traders assess the impact of rising oil supply and uncertain demand. Geopolitical tensions have provided some upward pressure, particularly following Israel’s renewed ground operations in Gaza and the U.S. airstrikes on Iranian-backed Houthis in Yemen.
Meanwhile, OPEC+ has announced its first production increase since 2022, planning to raise output by 138,000 barrels per day in April, which could weigh on prices in the near term.On the demand side, the U.S. Strategic Petroleum Reserve (SPR) has resumed buying crude, supporting the market. However, the purchases have been slower than anticipated, limiting their immediate impact. Additionally, U.S. crude inventories have risen for the second consecutive week, offsetting some of the supply-side concerns. The Federal Reserve’s recent decision to maintain interest rates and project two cuts later this year also adds an element of uncertainty, as traders weigh its impact on economic growth and energy demand.
USOIL price analysis (Feb 2025 - Mar 2025) Source: TradingView,
Technical outlook: WTI and Brent struggle to confirm direction
WTI crude remains within a narrow trading range between $65 and $68.50, struggling to gain clear momentum. The price continues to hold within a three-year support zone, but fears of an economic slowdown are limiting bullish bets. A break above $68.50 could trigger a short-term rally, while a drop below $65 would expose crude to further downside risks.
Brent Crude has shown a similar pattern, facing strong resistance at $72 per barrel. The 50-day exponential moving average (EMA) remains a key resistance level, with price action stuck between $70 and $72. If Brent breaks above Tuesday’s high of $72, it could target higher levels, while continued consolidation suggests range-bound trading in the near term.
Outlook: Uncertainty persists as traders await stronger signals
The oil market remains in a delicate balance, with supply increases from OPEC+ offsetting geopolitical risks. The pace of U.S. crude purchases, the trajectory of interest rates, and further geopolitical developments will likely determine the next significant move in prices. If U.S. buying activity accelerates, it could provide a stronger floor for crude. However, persistent demand concerns and potential oversupply risks suggest that prices could struggle to gain sustained bullish momentum in the short term.
In recent discussions, oil prices have shown a pattern of reacting sharply to geopolitical risks, only to be countered by supply-side adjustments from OPEC+ and shifts in U.S. energy policy. The balance between demand uncertainty and production decisions remains a key factor influencing price action. As seen in past trends, any acceleration in U.S. purchases or unexpected supply disruptions could provide short-term bullish momentum, while economic slowdown concerns continue to weigh on long-term outlooks.
