Oil News: Crucial $72.08 Pivot in Focus as EIA Inventory Data Looms

Futures Hold Steady as Traders Monitor Key Levels

Light crude oil futures traded slightly higher early Thursday, with traders focused on the critical 50% retracement level at $72.08. This price point is currently guiding near-term market direction, as a sustained move above it could ignite bullish momentum toward the recent peak at $73.65.

A breakdown below $72.08 might open the door for a test of the 50-day moving average at $71.82. If this support level fails, oil could swiftly drop to a support cluster defined by the 200-day moving average at $70.65 and the Fibonacci level at $70.35.

At 12:04 GMT, Light Crude Oil Futures are trading $72.30, up $0.20 or +0.28%.

US Crude Inventory Build Puts Pressure on Oil Prices

Oil prices remained largely unchanged on Thursday after hitting a near one-week high in the previous session. The American Petroleum Institute (API) reported a 3.34 million barrel increase in U.S. crude inventories last week, alongside a 2.83 million barrel rise in gasoline stocks and a 2.69 million barrel decline in distillate stocks.

Saxo Bank analyst Ole Hansen noted that the stock build contributed to the market’s indecision. While supply disruptions in Kazakhstan and delayed OPEC+ production increases offered support, broader demand concerns continue to cap gains.

Attention now shifts to the U.S. Energy Information Administration’s (EIA) official oil inventory data due later on Thursday. Analysts expect a 2.2 million barrel increase, following last week’s 4.1 million barrel rise, which exceeded forecasts.

Supply Risks Balanced by Potential Supply Boosts

The market is also digesting supply risks from the Caspian Pipeline Consortium, where oil flows were reduced by 30%-40% following a Ukraine drone attack. This could cut global supply by up to 380,000 barrels per day, lending a bullish undertone to prices.

However, potential resumption of oil flows from Iraq’s Kurdistan region could offset these risks. ING analysts noted that a restart could add 300,000 barrels per day to market supply. As of Thursday, Turkey had not confirmed the resumption, keeping traders on edge.

Broader Economic Concerns Weigh on Oil Demand

Economic headwinds also influence crude oil sentiment. Analysts are wary of U.S. import tariffs potentially dampening global economic growth and oil demand. Bjarne Schieldrop, SEB’s chief commodities analyst, warned that trade policy uncertainties could harm economic activity, particularly in Europe and China.

Market Outlook: Bearish Bias with Potential Downside

With crude oil prices struggling to hold above $72.08 and U.S. crude stocks on the rise, the market leans bearish. If EIA data confirms another inventory build, this could pressure prices further.

A decisive break below $70.35 might accelerate losses toward $67.06, while a move above $73.65 would signal renewed bullish momentum. For now, traders should focus on inventory data and technical levels to navigate short-term price movements.

More Information in our Economic Calendar.