Crude oil prices have exhibited limited movement over the past two weeks, reflecting a balance between bullish and bearish market factors. The NYMEX July West Texas Intermediate (WTI) futures have fluctuated between $60.02 and $64.20 per barrel, while Brent crude has traded between $63.30 and $66.65 per barrel. This consolidation indicates market participants are awaiting clearer signals before committing to a directional move.
Goldman Sachs has revised its global oil demand forecasts upward, anticipating an increase of 600,000 barrels per day (b/d) for 2025 and an additional 400,000 b/d in 2026. These projections suggest a strengthening demand outlook, which could support higher prices in the medium term.
Sanctions on Iranian oil exports continue to limit supply, offering some price support. However, negotiations between the U.S. and Iran have stalled, with Iran maintaining its nuclear enrichment activities. Additionally, mixed messages from the U.S. administration regarding Venezuela’s oil production and sanctions have introduced further uncertainty into the market.
Source: Oil & Gas Journal
The U.S. Energy Information Administration reported an increase of 1.3 million barrels in commercial crude oil inventories, bringing the total to 400.5 million barrels. Such inventory builds can exert downward pressure on prices, counteracting bullish factors.
Source: Oil & Gas Journal
OPEC+ is scheduled to meet on June 1 to discuss a potential output increase of 411,000 b/d starting in July. The prospect of additional supply entering the market may weigh on prices, especially if demand does not rise correspondingly.
Economic data from the U.S. presents a mixed picture. The Conference Board’s Leading Economic Index fell by 1.0% last month, marking the fifth consecutive monthly decline and the steepest drop since March 2023. Consumer sentiment also decreased, with the index dropping to 50.8 in April, the second-lowest reading on record. These indicators suggest potential headwinds for oil demand.
WTI futures are currently trading near their 8-, 13-, and 20-day moving averages, indicating a lack of strong directional momentum. The Relative Strength Index (RSI) stands at a neutral 50, suggesting neither overbought nor oversold conditions. Resistance is identified at $61.80, while support is noted at $60.40.
The oil market is experiencing a period of consolidation, with prices confined within a narrow range due to a confluence of opposing factors. While demand forecasts and geopolitical tensions provide upward pressure, inventory builds and potential increases in supply from OPEC+ pose downside risks. Market participants are likely to remain cautious until clearer trends emerge.
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