Oil News: Crude Futures Regain 200-Day MA as Ukraine Tensions Lift Outlook

Crude Oil Supported by Technical Breakout and Ukraine Unrest

WTI crude futures settled above their 200-day moving average on Friday, a key technical level now acting as support at $63.26. This bullish shift reflects short-covering and light speculative buying, helping lift prices toward resistance zones. Light crude settled at $63.66, up $0.14 or +0.22% on the day, with weekly gains of 1.4%.

Further buying will be needed to overcome successive resistance levels at $64.56 (long-term 50% retracement), $65.00 (50-day MA), and $66.18 (intermediate 50% level). A break above $66.18 could open the door to accelerated gains, with $69.69 (July 30 main top) the next upside target. Key support remains at $61.12, the August 13 bottom. A break below this could trigger a deeper move toward $56.09.

Ukraine Conflict Risk Premium Returns to Oil Market

Geopolitical tensions added a firm tone to crude prices after signs that Ukraine peace efforts are stalling. President Trump is attempting to broker a summit between Presidents Putin and Zelenskiy, but Russia has dismissed talks with no agenda and accused Ukraine of obstructing negotiations.

Meanwhile, Ukrainian strikes on a Russian oil refinery and the Unecha pumping station—key infrastructure on the Druzhba pipeline—have heightened concerns over potential supply disruptions to Eastern Europe. Russian flows to Hungary and Slovakia could be halted for at least five days. Traders are now pricing in greater geopolitical risk, especially with the U.S. considering tougher sanctions if ceasefire progress stalls.

U.S. Crude Stockpile Draw Offers Fundamental Support

Bullish inventory data further underpinned WTI. The EIA reported a 6 million barrel draw in U.S. crude stocks for the week ended August 15, far exceeding the 1.8 million barrel forecast. This suggests continued strength in domestic demand, even as drilling activity softens.

Baker Hughes reported a one-rig decline in the U.S. oil and gas rig count, now at 538, marking the fourth drop in five weeks. Slower rig activity could temper future supply growth and support prices in the near term.

Federal Reserve Rate Outlook Adds Tailwind Potential

Traders are also monitoring interest rate signals out of Jackson Hole. Fed Chair Jerome Powell acknowledged downside risks to the labor market while signaling a potential rate cut next month. While he stopped short of confirming it, the shift in tone was enough to support risk assets. Lower rates typically stimulate economic activity and energy demand.

Outlook: Bullish Near-Term with Geopolitical Risk Premium

WTI crude remains technically supported above its 200-day moving average. The combination of strong inventory draws, softening U.S. output indicators, and growing geopolitical tensions around Ukraine is creating a bullish backdrop.

A sustained break above $66.18 could prompt further buying. Traders should monitor resistance levels closely and keep an eye on diplomatic developments and Fed commentary for near-term catalysts.

More Information in our Economic Calendar.