Oil News: Crude Oil Eyes 200-Day MA as Strong Demand Sets Stage for Breakout

Crude Oil Firms as Technical Levels and Demand Outlook Drive Price Action

Light crude oil futures extended gains on Thursday, climbing for a second straight session after rebounding from a low of $61.12—the lowest since June 11. The move reflects growing optimism around U.S. demand strength, coupled with renewed geopolitical risk related to the Ukraine war and Russia’s future role in the global oil trade.

At 11:00 GMT, Light Crude Oil Futures are trading $63.27, up $0.56 or +0.89%.

Technical Pressure Mounts Near 200-Day Moving Average

Traders are closely watching the 200-day moving average at $63.26, a level that continues to act as a technical barrier. A decisive break above this mark could trigger a wave of short-covering.

Key upside targets include the long-term 50% retracement at $64.56 and the 50-day moving average at $65.00. Beyond that, momentum may accelerate toward pivots at $65.41 and $66.18.

Failure to hold support at $61.12, however, would leave the door open to downside pressure, with the next major support seen at $56.09—the May 30 swing low.

EIA Inventory Draw Offers Strong Bullish Signal

Data from the U.S. Energy Information Administration (EIA) showed a sharper-than-expected 6 million barrel drawdown in crude inventories last week, well above the forecasted 1.8 million-barrel decline. The draw brings total crude stocks to 420.7 million barrels and signals robust demand.

However, a rise in Cushing inventories and comments from Panmure Liberum suggest the large draw may also reflect increased refinery runs and stronger export flows, potentially masking softer underlying consumption trends.

OPEC, Russia Sanctions and India Tariffs Keep Traders on Edge

Geopolitical tensions remain a core driver. Russia dismissed ongoing Ukraine-related negotiations that exclude Moscow as “a road to nowhere,” while the U.S. announced a 25% tariff on Indian goods starting August 27 in response to India’s continued purchase of discounted Russian crude—now accounting for roughly 35% of India’s total oil imports.

This has revived market speculation about tighter sanctions on Russian energy exports, which analysts say is fueling bullish sentiment in the near term.

Oil Prices Forecast: Bullish Momentum Building, But Resistance Looms

With a strong inventory draw and geopolitical risk premium in play, near-term sentiment leans bullish. Traders will be watching closely for a clean breakout above $65.00 to confirm a shift in momentum. Until that happens, the $63.26 technical zone remains a key battleground. A failure to break higher could leave the market vulnerable to a retest of $61.12 support.

More Information in our Economic Calendar.