Oil News: Crude Gains as Russian Disruptions and U.S. Cold Snap Tighten Market

Prices Rise as Traders Weigh Supply Disruptions and Sanction Uncertainty

Light crude oil futures are moving higher on Wednesday, holding above the 50-day moving average at $71.69, which now serves as support along with the 200-day moving average at $70.64. Prices are currently hovering around a key 50% retracement level at $72.08, which could act as a trigger for further gains.

The first upside target is a minor resistance at $73.65, followed by another 50% level at $74.77. On the downside, major support rests at the Fibonacci level of $70.35 and the main bottom at $70.12.

At 11:26 GMT, Light Crude Oil Futures are trading $72.28, up $0.45 or +0.63%.

Supply Disruptions in Russia and U.S. Bolster Prices

Oil prices are receiving support from tightening supply conditions in Russia and the U.S. Russia’s Caspian Pipeline Consortium (CPC), a major export route for Kazakhstan’s crude, saw a significant disruption after a Ukrainian drone attack on a pumping station. The attack led to a 30-40% reduction in CPC oil flows, removing up to 380,000 barrels per day from the market.

In the U.S., extreme cold weather has caused production cuts in North Dakota, with the state’s Pipeline Authority estimating a decline of up to 150,000 barrels per day. The combination of Russian infrastructure attacks and weather-related output losses in the U.S. has reinforced price stability around the critical $70 level.

Uncertainty Over Russian Sanctions Keeps Market on Edge

Traders are closely monitoring developments around potential changes to Russian sanctions. The U.S. is engaged in diplomatic discussions with Russia in Riyadh, fueling speculation that some sanctions could be phased out. However, given ongoing geopolitical tensions, an immediate resolution appears unlikely.

Meanwhile, the market is also assessing the impact of broader supply-side factors, including production policies from OPEC and developments in Iran. Uncertainty over these geopolitical factors is contributing to volatility and limiting aggressive moves in either direction.

Trump’s Tariff Plans Introduce Demand Concerns

While supply disruptions are providing bullish support, concerns over demand remain. U.S. President Donald Trump announced plans to impose significant tariffs on key global industries, including a 25% duty on automobiles and similar measures on semiconductors and pharmaceuticals. If implemented, these tariffs could slow economic growth, weaken consumer spending, and reduce overall fuel demand.

Market Outlook: Bullish Bias with Key Resistance in Focus

With prices holding above key technical levels and supply constraints supporting the market, the near-term outlook leans bullish. A sustained move above $72.08 could drive crude toward $73.65 and beyond. However, demand-side risks, particularly from potential economic slowdowns triggered by new trade tariffs, could cap upside momentum. Traders should watch for further geopolitical developments and supply-side disruptions to gauge the next price move.

More Information in our Economic Calendar.