Oil News: Neutral Market Sentiment as Traders Await a Clear Catalyst

Oil Prices Dip but Hold Weekly Gains as Market Awaits Catalyst

Light crude oil futures edged lower on Friday, with the market slipping beneath the key 50% retracement level at $72.08 and the 50-day moving average at $71.93. A sustained move below this average could set up a test of the 200-day moving average at $70.65, positioning crude in a potential rangebound trade between these technical markers. The market now sits within a retracement zone, with the 50% level at $72.08 above and the 61.8% level at $70.35 below.

The short-term range of $73.65 to $70.12 reflects the neutral sentiment, as prices oscillate between swing tops, bottoms, moving averages, and retracement levels. This technical setup signals that traders may be holding back, awaiting a clear market catalyst to break the current stalemate.

At 11:36 GMT, Light Crude Oil Futures are trading $71.84, down $0.64 or -0.88%.

Supply Disruptions Add Support to Crude Prices

Oil prices dipped on Friday but remain on track for a weekly gain, driven by concerns over supply disruptions in Russia and a positive demand outlook in the United States and China. While Brent futures and U.S. West Texas Intermediate (WTI) crude both eased, they are up approximately 2% this week, marking the strongest weekly advance since early January.

The disruptions to oil supply have been a key focus. Russia reported that oil flows through the Caspian Pipeline Consortium—a critical route for Kazakhstan’s crude exports—were reduced by 30%-40% following a Ukrainian drone strike on a pumping station. Despite the damage, Kazakhstan managed to push record high oil volumes, although how this was achieved remains unclear.

U.S. Inventory Data Signals Mixed Supply Picture

The latest data from the U.S. Energy Information Administration showed a rise in crude oil stockpiles last week, while gasoline and distillate inventories fell. Seasonal maintenance at refineries contributed to lower processing levels. The drawdowns in U.S. gasoline and distillate stocks, alongside concerns over Russia’s supply, have provided underlying support to oil prices.

Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that expectations for a Russia-Ukraine peace deal had waned, contributing to renewed buying interest in the oil market. While earlier hopes of eased sanctions on Moscow softened, Ukraine’s hardened stance suggests geopolitical risk remains a market factor.

Demand Outlook Remains Strong in U.S. and China

On the demand side, global oil consumption has averaged 103.4 million barrels per day (bpd) through February 19, marking a 1.4 million bpd increase, according to JPMorgan analysts. They expect that colder weather in the U.S. and ramped-up industrial activity in China post-holidays could further boost demand in the coming weeks.

The interplay between robust demand signals and supply uncertainties continues to shape market sentiment, keeping prices supported despite Friday’s pullback.

Market Forecast: Neutral to Bullish Bias

Given the neutral technical indicators and the market’s wait for a decisive catalyst, crude oil prices may continue to trade in a tight range in the near term.

However, with supply risks from Russia and potential demand growth in major economies, the bias leans slightly bullish. A move above the 50-day moving average at $71.93 could trigger more buying interest, while a breakdown to the 200-day moving average at $70.65 might attract fresh support, maintaining a balanced but cautiously optimistic market outlook.

More Information in our Economic Calendar.