Crude Oil News Today: US Demand Slows as Geopolitical Tensions Stay Heated

James Hyerczyk
Updated: Apr 25, 2024, 12:19 GMT+00:00

Key Points:

  • Mixed EIA data signals uncertain fuel demand in U.S.
  • Geopolitical strife in Gaza may disrupt oil supply chains.
  • Upcoming U.S. economic reports pivotal for oil market forecasts.
Light Crude Oil Futures

In this article:

Market Overview

Oil prices are steadying on Thursday after a decrease the previous day. This stability is occurring as decreasing fuel demand in the U.S.—the world’s largest oil consumer—is contending with escalating tensions in the Middle East, a critical oil-producing region.

Price Movements

Both major oil benchmarks are showing slight increases early in the trading day. These movements reflect a balance between concerns over demand and geopolitical risks.

At 09:10 GMT, Light Crude Oil Futures are trading $82.96, up $0.15 or +0.18%.

Demand Factors

Data from the U.S. Energy Information Administration (EIA) is showing mixed signals in fuel stockpiles: gasoline reserves are falling less than expected, and distillate stockpiles are rising unexpectedly, suggesting a slowdown in demand. This trend is coinciding with cooling business activities in the U.S. and robust inflation and employment figures, prompting expectations that the U.S. Federal Reserve might delay rate cuts.

Geopolitical Tensions

On the geopolitical front, tensions remain high with the ongoing conflict in Gaza between Israel and Hamas. Despite a temporary easing of tensions between Iran and Israel, escalations in Gaza are expected to worsen, potentially affecting oil supplies should conflicts spread to neighboring areas.

Market Sentiment and Forecast

Market sentiment is currently leaning towards caution, influenced by global economic concerns and geopolitical instability. Analysts are predicting that upcoming economic indicators from the U.S., along with supply actions from major producers and demand changes as summer approaches, will be crucial in shaping the market’s direction. With the current data and geopolitical context, the market outlook is remaining moderately bullish, assuming no further deterioration in global conditions.

These elements are collectively underscoring a complex oil market situation where traders must weigh ongoing economic indicators against geopolitical developments.

Technical Analysis

Daily Light Crude OIl Futures

The short-term trend is down, but the light crude oil futures contract remains well supported by the 50-day moving average at $80.67 and the 200-day moving average at $78.29.

The short-term range is $87.13 to $80.70. It’s 50% level at $83.92 is the level that will determine if the market resumes the uptrend over the near-term or if prices weaken into the 50- and 200- day moving averages.

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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