Light crude oil futures ticked higher in early Tuesday trade, stabilizing above their 50-day moving average after a strong start to the week. Monday’s rally saw prices spike nearly 3% before easing off highs at $63.88, falling just short of recent resistance levels. The market’s ability to stay above its 50-day average remains a key technical marker, with traders eyeing the 200-day moving average at $66.57 as the next upside target.
At 11:13 GMT, Light Crude Oil Futures are trading $62.79, up $0.28 or +0.45%.
Oil’s early-week strength was largely driven by OPEC+ holding firm on its output hike of 411,000 barrels per day for July. This decision came as a relief to traders who had braced for a potentially larger increase. With supply additions remaining limited, traders perceived the group’s stance as supportive for prices in the near term.
Geopolitical concerns are once again playing into oil markets. Over the weekend, Ukraine launched one of its largest drone offensives on Russian targets, including a strike on a key highway bridge and bombers deep inside Siberia. These developments have revived risk premiums across energy markets.
At the same time, Iran is expected to reject a U.S. nuclear deal proposal, which would likely extend sanctions on Iranian oil exports. As one Iranian diplomat stated, the offer fails to meet Tehran’s demands regarding uranium enrichment and sanctions relief. Traders now see limited risk of near-term increases in Iranian crude supply, tightening global balances further.
A weaker U.S. dollar is also lending support to crude prices. The dollar index is trading near six-week lows as investors assess the potential economic fallout from the Trump administration’s tariff policy. For oil traders, a softer dollar makes crude more affordable for foreign buyers, boosting demand.
In North America, wildfires in Alberta have disrupted roughly 344,000 barrels per day of oil sands output—roughly 7% of Canada’s total crude production. This unplanned supply loss is yet another bullish factor for prices, especially if U.S. crude inventory data later this week shows a drawdown.
With geopolitical tensions high, OPEC+ maintaining moderate output increases, and the dollar under pressure, the bullish case for oil remains intact. As long as light crude holds above its 50-day moving average, traders will likely test higher levels, with the 200-day average at $66.57 now in sight.
More Information in our Economic Calendar.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.