Oil News: Market Looks to $70.15 for Direction as Crude Oil Futures Slide

Lower as Traders Eye Key Levels

Light crude oil futures are trading lower on Friday after earlier gains failed to hold. The market briefly pierced the 50-day moving average at $70.15, rallying to $70.76, before retreating.

The session’s direction hinges on whether traders can sustain momentum above this key technical level. If bullish momentum resumes, prices could test the 50% retracement level at $71.53. Conversely, a sustained sell-off could drive prices toward the Fibonacci support level at $69.11.

At 11:49 GMT, Light Crude Oil futures are trading $69.83, down $0.27 or -0.39%.

Weekly Gains on Geopolitical Tensions and Rising Chinese Demand

Oil prices are set to close the week with a 5% rise, marking the strongest weekly gain since late September. Heightened geopolitical tensions from the Ukraine war are underpinning the market. Moscow escalated its offensive after Western nations provided Kyiv with advanced weaponry, raising the risk of disruptions to Russia’s oil supply. Russian President Vladimir Putin confirmed the use of ballistic missiles and cautioned of potential global conflicts, amplifying concerns over energy market stability.

The conflict has also seen Ukraine target Russian oil infrastructure using drones, with June attacks on refineries serving as a recent example. Market participants remain wary of the potential for further strikes that could damage supply chains and escalate the conflict.

China’s Policy Shifts Support Energy Imports

China, the world’s largest crude importer, announced policy measures to bolster trade, including increased support for energy imports. Analysts expect Chinese crude imports to rebound in November, driven by discounted prices on Iraqi and Saudi oil. This demand surge may offset reduced supply from Iran, where U.S. sanctions could tighten further. The measures are part of Beijing’s broader strategy to stabilize its economy and counteract global trade tensions.

Global Demand Concerns Temper Gains

Despite geopolitical and demand-driven support, oil prices briefly dipped following weak Eurozone economic data. The bloc’s dominant services sector contracted sharply, while manufacturing activity deepened its recession. The data amplified concerns about slowing global demand, though it has not derailed oil’s upward momentum this week.

Goldman Sachs issued a note projecting Brent crude prices to remain within a $70 to $85 range. However, potential disruptions in Iranian output could push prices toward the upper limit.

Market Forecast

Light crude oil is likely to trade within a tight range in the near term, with the 50-day moving average at $70.15 serving as a critical pivot. If buyers can hold above this level, prices may climb toward $71.50. However, persistent selling pressure could send prices back to test $69.11. Geopolitical risks and China’s demand recovery favor a bullish outlook, but weaker global economic data could cap gains.