Oil News: Near-term Outlook Hinges on Russia-Ukraine Peace Talks and U.S. Tariffs

Crude Oil Prices Hold Steady as Key Technical Levels Guide Market Direction

Light crude oil started the week in a neutral stance, trading within its intermediate and long-term moving averages while remaining in the middle of its three-month range. Early price action suggests a balanced market, with traders closely watching critical levels for signs of directional movement.

The 200-day moving average at $70.64 serves as a key support level, while resistance is marked at the 50-day moving average of $71.55. A short-term retracement zone between $70.35 and $72.08 is in focus—sustained movement above $72.08 could signal a bullish breakout, while a drop below $70.35 may reinforce a bearish tone. Further upside could be capped by a pivot at $74.91, while the downside remains vulnerable until $67.06.

At 11:22 GMT, Light Crude Oil Futures are trading $70.87, up $0.16 or +0.23%.

Geopolitical Uncertainty Keeps Oil Prices Range-Bound

Oil prices remain steady as traders monitor ongoing geopolitical developments, particularly peace talks between Russia and Ukraine. Any agreement that leads to sanctions relief could ease global supply constraints and exert downward pressure on prices.

Meanwhile, supply risks persist following a drone attack on Russia’s Kropotkinskaya pumping station, impacting oil flows via the Caspian Pipeline Consortium (CPC). While disruptions have been limited so far, the frequency of such attacks raises concerns over future supply stability.

The U.S. dollar’s recent weakness is providing mild support to crude prices, as a softer dollar makes oil cheaper for foreign buyers. The dollar index remains near a two-month low after weaker-than-expected U.S. retail sales data.

Market Weighs Potential Sanctions Relief and Trade Tariff Risks

The possibility of a Russia-Ukraine peace deal has major implications for crude oil supply and pricing. Analysts at Bank of America estimate that if sanctions on Russian oil are lifted, Brent crude prices could drop by $5 to $10 per barrel, as shorter shipping routes to Europe would increase supply availability. Global refining margins, which have already been normalizing, could face further downside pressure under such a scenario.

At the same time, trade policy concerns are emerging as a potential headwind for oil demand. President Donald Trump’s directive to study reciprocal tariffs could spark a global trade war, which may weigh on economic growth and energy demand. Market participants will be watching closely as the administration prepares recommendations by April 1.

U.S. Rig Count Rises, Signaling Potential Supply Growth

U.S. energy firms added oil and natural gas rigs for a third consecutive week, marking the first sustained increase since December 2023, according to Baker Hughes. A rising rig count suggests potential growth in U.S. production, which could contribute to oversupply concerns already weighing on the market.

Outlook: Key Levels Will Determine Near-Term Direction

With trading activity expected to be light due to the U.S. holiday, crude oil prices may remain within their current range. However, traders should watch for a decisive move above $72.08 or below $70.35 to confirm the next major trend.

Geopolitical developments, particularly progress in Russia-Ukraine talks, will remain a key factor in price action this week. Any indications of sanctions relief could add bearish pressure, while further disruptions to Russian supply could trigger upside volatility. Additionally, global trade policy uncertainty adds another layer of risk to the demand outlook.

For now, crude remains in a consolidation phase, with traders positioning for a potential breakout in the coming sessions.

More Information in our Economic Calendar.