Oil Prices Rebound – Will WTI Hit $70 or Slip Below $65 Next?

Russian President Vladimir Putin signaled conditional support for a U.S.-led ceasefire in Ukraine, yet uncertainty remains over how quickly sanctions on Russian energy will be lifted.

“Russia’s lukewarm response to a 30-day ceasefire proposal has cast doubt on an immediate peace deal,” said Tony Sycamore, a market analyst at IG. Sanctions relief remains uncertain, keeping a floor under oil prices for now.

Beyond geopolitical factors, energy markets are also grappling with a growing trade war. U.S. President Donald Trump escalated tensions by threatening a 200% tariff on European alcohol imports, further complicating global economic forecasts.

Oil Supply Surplus Raises New Concerns

Despite Friday’s gains, analysts warn that global oil supply may outstrip demand in the coming months. The International Energy Agency (IEA) estimates that global oil supply could exceed demand by 600,000 barrels per day (bpd) in 2024, largely due to rising U.S. production.

• U.S. crude output is projected to hit a record high of 13.4 million bpd by mid-2025.

• IEA revised down demand growth estimates for Q4 2024 and Q1 2025 due to trade uncertainty.

• Macroeconomic risks remain elevated, with concerns that higher tariffs could slow global economic activity and curb fuel consumption.

“The economic backdrop supporting oil demand is weakening,” the IEA noted. Rising trade tensions and softening industrial activity are key headwinds limiting upside potential for crude prices.

WTI Crude Oil Faces Key Technical Barriers

WTI crude is currently trading around $66.99, approaching a critical resistance level at $67.90. The price action remains range-bound, with a symmetrical triangle formation signaling potential volatility ahead.

Key Technical Levels to Watch:

• Immediate resistance: $67.90 – A breakout could push prices toward $68.51 and $69.27.

• Immediate support: $66.34 – A break lower may trigger a retest of $65.70 and $65.21.

• 50-day EMA: $66.95 – Acting as a dynamic resistance.

If oil breaks above $67.90, bullish momentum could drive WTI toward $70 in the near term. However, failure to sustain gains may see another decline toward $65, reflecting broader demand concerns.

Conclusion: Oil prices are at a crossroads, with supply concerns, trade risks, and geopolitical tensions shaping the market’s next move. Traders should monitor $67.90 as a key breakout level, while a drop below $66.34 could accelerate downside pressure.