Oil News: First Weekly Gain in Three Weeks Boosts Price Outlook

Futures Rally on Tightening Supply and Stronger Demand Outlook

Light crude oil futures surged on Friday, decisively crossing the 50-day moving average and turning the intermediate trend bullish. Support at $69.11 has held firm, positioning the market to challenge resistance at $71.53. A break above this level could accelerate gains toward the 200-day moving average at $72.93.

At 12:22 GMT, Light Crude Oil futures are trading $70.61, up $0.59 or +0.84%.

Crude Oil Set for Weekly Gains on Supply Concerns

Crude oil prices are heading for their first weekly rise in three weeks, with Brent and West Texas Intermediate (WTI) futures both advancing more than 1% on Friday. Both benchmarks are on track for weekly gains exceeding 3%, fueled by fears of supply disruptions linked to escalating sanctions on Russia.

The European Union has implemented its 15th round of sanctions against Russia, targeting its shadow tanker fleet, which has supported the country’s crude exports. Analysts expect the U.S. to impose similar restrictions, further tightening supply. “The idea of less Russian oil on the water remains fresh,” said John Evans, PVM oil analyst.

Tensions surrounding Iran also support a bullish case. Western powers, including Britain, France, and Germany, signaled readiness to reinstate international sanctions to curb Iran’s nuclear ambitions.

China Drives Optimism with Rising Imports

China’s crude imports grew in November for the first time in seven months, driven by lower prices and refiners stockpiling supply. Analysts expect robust imports to continue into 2025 as Saudi Arabia remains a preferred supplier due to competitive pricing.

China’s recent economic stimulus measures are fueling optimism about stronger demand in the world’s largest crude importer. The International Energy Agency (IEA) raised its 2025 oil demand growth forecast to 1.1 million barrels per day (bpd), citing China’s potential resurgence.

2025 Surplus Weighs on Long-Term Outlook

Despite the near-term bullish outlook, concerns of a supply surplus in 2025 loom. The IEA predicts non-OPEC+ producers, including Brazil, Guyana, and the U.S., will increase output by 1.5 million bpd. This potential oversupply could cap long-term price gains, particularly if demand growth slows.

Market Forecast

Crude oil prices are likely to remain bullish in the near term, with $71.53 as the key level to watch. A breakout could see prices rally toward $72.93. However, traders should keep an eye on longer-term supply forecasts, which may create headwinds as additional barrels come online in 2025.