Crude Oil News Today: Mixed Trends in Global Oil Prices Ahead of NFP Report

Prices Mixed Amidst Diverse Demand

International Brent and U.S. West Texas Intermediate (WTI) crude oil prices are trading mixed on Friday, with early gains spurred by growing consumption in the United States and China. However, the overall weekly trend is showing a slight decline, with Brent falling by 0.1% and WTI by 0.5%. This situation mirrors a market caught between positive and negative influences.

At 10:52 GMT, Light Crude Oil Futures are trading $78.84, down $0.09 or -0.11%.

Chinese Market and EV Impact

A key factor in the market’s fluctuation is the projected change in Chinese demand. The China National Petroleum Corporation (CNPC) forecasts a reduction in gasoline and diesel usage due to an increase in Electric Vehicles (EVs) and LNG-powered trucks, potentially cutting traditional fuel demand by 10-12%.

Federal Reserve’s Rate Cut Indications

Federal Reserve Chair Jerome Powell’s recent comments suggest potential rate cuts, a move that has been positively received in the market. This optimism is also bolstered by Russia’s reduction in crude oil exports and a temporary pause in operations along the Keystone pipeline.

Strong Demand Evident in Inventory Data

U.S. gasoline and distillate stock levels have significantly dropped, more than analysts anticipated, hinting at a solid demand. The upcoming driving season in the U.S. and growing oil imports in China, which increased by 5.1% in early 2024, along with India’s heightened fuel consumption, indicate a possible tightening of the market.

Global Supply and Demand Balance

According to the International Energy Agency (IEA), the global oil market is sufficiently supplied. Demand growth is moderating while supply from the Americas is increasing. Despite OPEC+’s decision to extend oil output cuts, the IEA anticipates a balanced market for 2024. Non-OPEC+ countries, including the United States, Brazil, and Guyana, are expected to drive supply growth, matching the forecasted demand.

Short-Term Market Forecast

Given the Federal Reserve’s stance, upcoming labor market data from the U.S., and the current supply-demand scenario, the short-term outlook for the crude oil market leans towards bullish.

Despite potential demand uncertainties, especially from China, factors like the prospect of U.S. rate cuts and a potentially tighter market suggest a rising trend in prices.

Technical Analysis

Light crude oil futures continue to consolidate on Friday above the 200-day moving average support at $76.84. The price action suggests traders are leaning toward bullish, but they need a catalyst to drive prices higher.

A trade through $80.85 will signal a resumption of the uptrend with $82.68 the next likey target.

On the downside, a failure to hold the 200-day MA will change the long-term trend to down with the 50-day moving average at $75.22 the next likely landing spot.