Oil News: Crude Futures Stabilize as Libya Unrest Offsets Bearish Sentiment

Crude Oil Prices Hold Near Two-Week Lows Despite Libya Supply Disruption

Crude oil news today shows light crude oil futures inching higher in early trading on Tuesday. However, the movement reflects more of a technical bounce rather than fresh buying interest. While the broader trend remains bullish, momentum has shifted to the downside, keeping traders cautious. The market is currently range-bound, with key technical levels in focus.

If prices breach $72.38, traders may see a resumption of the downtrend, targeting $71.51 initially, followed by the 200-day moving average at $70.94. Resistance is marked at the 50% pivot of $75.47, offering some upside potential. These levels are likely to guide trading activity in the near term.

At 13:21 GMT, Light Crude Oil Futures are trading $73.86, up $0.69 or +0.94%.

Libya Supply Disruption Offers Support

Crude oil prices received some support from disruptions in Libya’s oil exports. Protests at the Es Sidra and Ras Lanuf ports halted crude loading operations, threatening about 450,000 barrels per day (bpd) of exports. Analysts warn that if unrest spreads, it could jeopardize Libya’s 1.4 million bpd production capacity, a scenario that would tighten global supply.

Despite this, the upward pressure on prices was tempered by other bearish factors, including weakening demand signals from key markets such as China and the United States.

China’s Economic Concerns Weigh on Demand Outlook

China, the world’s largest crude oil importer, reported a sharp contraction in manufacturing activity in January. The official purchasing managers’ index (PMI) dropped to 49.1, its lowest level in five months, underscoring a slowdown in industrial activity. The weaker-than-expected data has raised concerns over China’s oil demand growth, as factory activity continues to lag amidst deflationary pressures and subdued domestic consumption.

Meanwhile, independent Chinese refineries face operational challenges due to tighter government policies and U.S. sanctions on Russian crude. As a result, several refineries have reduced or halted production, further clouding demand prospects.

U.S. Weather and Broader Market Sentiment Add Pressure

In the U.S., warmer-than-expected temperatures are dampening demand for heating fuels, which had spiked during prior cold weather. Broader financial markets are also contributing to bearish sentiment, as volatility in U.S. tech stocks and uncertainty over tariffs and sanctions weigh on market confidence. Analysts highlight that these factors are likely to keep crude prices volatile in the near term.

Oil Prices Forecast: Bearish Outlook Prevails

Given the current market conditions, crude oil prices are likely to remain under pressure. The bearish sentiment is driven by weak economic data from China, muted U.S. fuel demand, and uncertainty over sanctions and trade policies.

While supply disruptions in Libya offer some support, it is unlikely to outweigh the broader demand concerns. Traders should closely monitor key technical levels and geopolitical developments as the market navigates this challenging environment.

More Information in our Economic Calendar.