Oil Steadies as Technicals Cap Rally Driven by Tighter Supplies
Oil held steady after key technical levels provided resistance to a rally that has been driven by continued signs of tightening US crude supplies.
West Texas Intermediate futures were little changed above $74 a barrel, paring gains after oil failed to breach its 200-day moving average earlier in the day. The technical level has served as a ceiling for prices since October.
On the fundamental side, government data released Wednesday showed US crude stockpiles fell 959,000 barrels last week, the seventh straight drawdown and the longest streak of declines in three years. Traders are also bracing for frigid weather in the US, which has boosted demand for heating fuel and raised the risk of freeze-offs in production areas.
Oil has had a strong start to 2025 as prices break out of a monthslong range, but many analysts continue to warn of a glut this year, and technical indicators suggest the advance may have run too far. The market is also bracing for Donald Trump’s second presidential term, with threats of tougher sanctions on Iran and trade tariffs on China.
In another sign of tightening supply, Russian data show that the country’s oil production was below its OPEC+ output target last month, after seaborne exports slumped to the lowest level since August 2023. Meanwhile, ports in the eastern Chinese province of Shandong, the top destination for Iranian crude, were urged to prevent US-sanctioned tankers from docking at their berths.
WTI for February delivery was little changed at $74.43 a barrel at 10:42 a.m. in New York. Brent for March settlement was little changed at $77.10 a barrel.
Source : Bloomberg
