Oil prices hold firm ahead of Fed decision due to supply concerns
Oil futures remain firm above key support levels
WTI crude oil futures retreated below $71 per barrel on Monday, easing from last week’s 6% rally fueled by tighter supply expectations linked to sanctions on Russia and Iran. Optimism surrounding China’s upcoming economic stimulus measures also supported last week’s surge.
The current pullback appears to be driven by profit-taking as traders await the U.S. Federal Reserve’s interest rate decision, expected to include a 25 basis-point rate cut aimed at boosting economic growth.
WTI Crude oil ( Nov 2024 - Dec 2024) Source: Trading View
Technical outlook: Key support and resistance levels
WTI crude oil is trading at $70.39, down 0.90%, yet maintaining its bullish structure above the pivot point of $69.94. The 50-day EMA at $69.87 and 200-day EMA at $69.25 signal underlying support. Immediate resistance stands at $71.38, followed by $72.23 if buyers regain momentum. Conversely, a clear breach below $69.94 could turn sentiment bearish, potentially testing $69.11 and even $68.27 if selling pressure intensifies.
Similarly, Brent crude oil is holding at $74.11, supported by the 50-day EMA at $73.38 and the 200-day EMA at $72.91. Resistance looms at $74.55, with $75.35 marked as the next target if bullish momentum persists. Failure to sustain gains above $73.57 could prompt a retest of $72.56 and $71.91.
Global supply concerns stemming from geopolitical risks and production discipline among OPEC+ members continue to underpin oil prices. The United Arab Emirates’ planned shipment reductions early next year further reinforce the bullish sentiment. Traders will closely monitor this week’s Fed decision, which could influence economic growth forecasts and drive future oil demand expectations.Previously, we discussed oil prices surging due to tightening global supplies and geopolitical risks.
