Crude Oil News Today: Rally Driven by Supply Disruption Fears

James Hyerczyk
Updated: Apr 12, 2024, 13:37 GMT+00:00

Key Points:

  • Oil prices rise on Middle East supply disruption fears.
  • IEA cuts 2024 oil demand forecast, citing slower consumption.
  • Global oil supply to increase, led by non-OPEC nations.
Crude Oil News Today

In this article:

Supply Concerns Rise Amid Middle East Unrest

Oil prices climbed on Friday due to escalating tensions in the Middle East, which heightened fears of potential supply disruptions. The focus on the geopolitical strife overshadowed market dynamics that could have pushed prices lower, such as anticipated fewer U.S. interest rate cuts.

At 10:43 GMT, Light Crude Oil Futures are trading $86.21, up $1.19 or +1.40%.

Geopolitical Risks Drive Market Sentiment

This week’s market sentiment was heavily influenced by the possibility of Iranian retaliation following an attack on Iran’s embassy in Damascus by suspected Israeli warplanes. This geopolitical event kept oil prices near a six-month high despite factors such as increasing U.S. oil inventories that might normally lead to lower prices.

IEA Cuts Demand Forecast

The International Energy Agency (IEA) revised its 2024 world oil demand growth forecast downwards, reflecting decreased consumption in OECD countries and ongoing sluggishness in global factory activity. The IEA’s updated forecast anticipates a growth of 1.2 million barrels per day (bpd), a cut of 130,000 bpd from its previous estimate.

Outlook on Global Supply and Demand

While the IEA trimmed its demand growth expectations, it also reported that global oil supply is projected to rise by 770,000 bpd. This increase is expected to be led by non-OPEC countries. Despite the global economic slowdown and increasing adoption of clean energy technologies, the IEA still sees these levels of demand growth as aligned with pre-COVID trends.

Short-Term Market Forecast

Despite the spike in prices on Friday due to current geopolitical tensions, the overall oil market is poised for a weekly decline. Unless there is further escalation in the Middle East or unexpected supply cut-offs, oil prices may stabilize. However, the risk of supply disruption remains a critical factor that could influence market movements. Traders should watch for any significant geopolitical developments over the weekend, which have historically led to volatile oil prices by the start of the new week.

Technical Analysis

Light Crude Oil Futures
Daily Light Crude Oil Futures


The trend is up but the market is struggling, indicating consolidation or distribution at current price levels.A consolidation would be a potenially bullish side, but we won’t know until traders reaffirm the uptrend by taking out the recent high at $87.63.

A distribution would be potentially bearish. A trade through $84.55 will change the minor trend to down, leading to a significant sell-off into $83.96 to $82.68.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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