Crude oil prices edge higher as demand outlook improves
Crude oil nears $71.50 as global demand rebounds
West Texas Intermediate (WTI) crude oil prices extended gains on Friday, climbing to $71.50 per barrel as global fuel demand increased, and trade war fears eased following U.S. President Donald Trump’s delay in imposing reciprocal tariffs. Additionally, Brent Crude moved higher, trading near $75.21 per barrel as investors absorbed supply and demand dynamics amid evolving geopolitical tensions.
A JPMorgan report revealed global oil demand has risen to 103.4 million barrels per day (bpd), marking a 1.4 million bpd increase year-over-year. The report cited an uptick in mobility and heating fuel demand, reducing the gap between actual and projected consumption.Oil prices also found support from easing global trade tensions, with Trump directing U.S. officials to review tariff levels for different countries before imposing reciprocal duties. The delay reduced immediate concerns about a global trade war, boosting investor risk appetite and lifting oil prices from recent lows.
USOIL price dynamics (July 2024 - February 2025) Source: TradingView.
Supply concerns linger amid Russia-Ukraine peace talks
Despite bullish momentum, concerns over Russian oil supply returning to global markets following Trump’s discussions with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy weighed on prices. If peace negotiations progress, lifting sanctions on Russian energy exports could flood the market with additional supply, pressuring crude oil prices in the medium term.
Additionally, the US Federal Reserve’s (Fed) hawkish stance on interest rates remains a factor in demand projections. Persistently high U.S. inflation data suggests the Fed could keep rates elevated for longer, potentially slowing economic activity and crude consumption in the world’s largest oil-consuming nation.
Crude oil futures hover around the 50-day moving average at $71.51, with further bullish momentum likely if prices hold above this level. The 200-day moving average at $70.67 acts as strong support, preventing further declines. A break above $72 could signal additional upside toward the next resistance at $74. However, a drop below $70.67 could reinforce bearish sentiment, leading to a potential retest of $68.50.
Market outlook: cautiously bullish
Oil prices appear poised to end a three-week losing streak, supported by rising demand and easing trade tensions. However, the potential return of Russian oil supply and sustained Fed hawkishness could limit long-term upside potential. Traders will closely watch Trump’s tariff decision by April 1 and upcoming U.S. inflation data for further market direction.
Previously, we highlighted WTI’s struggle to hold support amid shifting supply risks. With demand rebounding and trade tensions easing, the next price movement hinges on geopolitical developments and Fed policy shifts.
