Oil News: 200-Day Moving Average Sets the Tone as Mideast Strikes Spark Short-Term Bid

Geopolitical Tensions Lift Prices, but Rally Stalls Below Resistance

Light crude oil futures rose modestly on Wednesday, but the rally faltered below key technical resistance. Prices briefly topped the 200-day moving average at $63.31, reaching $63.44 before sliding back under the level—underscoring persistent buyer hesitation. A firm close above this line would set a more bullish tone, but traders are eyeing heavier resistance at $64.40 (50-day moving average) and a pivotal level at $64.56.

A sustained break above these hurdles could open the door to further upside, with resistance clustered at $65.41, $66.03, and $66.18—the latter seen as a trigger point for a potential acceleration toward $68.70. On the downside, minor support holds at $61.45, with stronger footing at $61.12.

At 11:09 GMT, Light Crude Oil Futures are trading $63.25, up $0.62 or +0.99%.

Middle East and Ukraine Conflict Drive Short-Term Bid in Oil

Crude prices were lifted early Wednesday after Israel reportedly targeted Hamas leadership in Qatar. The attack initially sent oil benchmarks up nearly 2% before gains cooled. Separately, geopolitical risk escalated further as Poland intercepted drones during a Russian assault in Ukraine—marking the first time a NATO country engaged directly. While tensions are elevated, traders noted the absence of any immediate supply disruptions.

Despite the headlines, the rally failed to gain momentum. Analysts at SEB warned that “the dark cloud of surplus ahead” continues to pressure the market, highlighting Brent’s $2 drop from last Tuesday as evidence that geopolitical risk premiums are short-lived without a direct threat to supply.

U.S. Tariff Threats and Fed Policy in Focus

Adding to the political backdrop, former U.S. President Donald Trump has reportedly urged the EU to impose 100% tariffs on Chinese and Indian imports. Both countries are major buyers of Russian oil, and any disruption to their access could have knock-on effects across global oil flows. However, aggressive sanctions risk clashing with inflation concerns and may complicate the Federal Reserve’s rate decision.

Traders continue to anticipate a Fed rate cut at the September 16-17 meeting—a move that would likely stimulate economic activity and oil demand. But until that cut materializes, uncertainty around monetary policy remains a headwind.

EIA Stock Data and OPEC+ Output Cap Further Gains

Supply-side concerns continue to dominate trader sentiment. Preliminary data from the American Petroleum Institute (API) showed a build in U.S. crude, gasoline, and distillate inventories last week.

Expectations for Wednesday’s EIA report call for a 1.9 million barrel draw, but the broader trend of rising inventories and increasing OPEC+ production is weighing heavily.

The U.S. Energy Information Administration (EIA) reiterated that global oil prices will face downward pressure in the coming months due to rising stockpiles, reinforcing a bearish supply outlook.

Market Forecast: Bearish Bias Holds Unless Key Resistance Breaks

While geopolitical events are offering short-term support, the failure to break above key technical levels—coupled with a bearish inventory outlook and rising OPEC+ output—keeps the broader trend under pressure.

Unless light crude can establish a foothold above $66.18, traders are likely to favor selling rallies, especially if today’s EIA data confirms stock builds. The near-term forecast remains bearish.

More Information in our Economic Calendar.