Oil News: This Week’s Focus Turns to Whether Supply Curbs Can Outrun Demand Weakness

Oil Markets Struggle With Demand Cuts Despite Supply-Side Support

Crude oil prices have steadied over the past week, bolstered by supply-side developments but weighed down by persistent demand concerns. While sanctions and OPEC+ compliance efforts offered some support, traders continue to face a market defined by weak consumption growth and macroeconomic uncertainty.

Last week, Light Crude Oil Futures settled at $64.01, +3.15 or 5.18%.

Technically, the trend is down, but trader reaction to a weekly pivot at $63.06 should determine the direction for the week.  On the upside, a strong bullish catalyst could launch a near-term rally into a support zone formed by a long-term pivot at $68.67 and the 52-week moving average at $69.00. On the downside, the first retracement target is $59.33, followed by $54.48.

Iran Sanctions and OPEC+ Output Cuts Reinforce Supply Tightness

Fresh U.S. sanctions on Iranian oil exports helped stabilize sentiment. Measures targeting Chinese refiners and tougher enforcement signals from the U.S. Treasury have rekindled concerns over reduced Iranian supply in the global market. In parallel, OPEC has secured deeper output commitments from members such as Iraq and Kazakhstan, aiming to reinforce compliance and offset recent overproduction.

These announcements come as exports from key producers remain high, but they have contributed to a more supportive tone for crude futures, at least temporarily. Iraq confirmed it will cut 70,000 barrels per day in April to align with its pledged quota, while Kazakhstan’s early April output dropped by 3%, though still above its target.

Demand Growth Expectations Revised Sharply Lower

The most significant drag on prices continues to be the weakening global demand outlook. Both the International Energy Agency and OPEC cut their oil demand growth estimates, citing broader macroeconomic stress. The IEA now forecasts global oil demand to increase by only 730,000 barrels per day—its lowest projection since 2020. The EIA pegs growth slightly higher at 900,000 barrels per day, but both agencies warn of economic risks from U.S.-China trade disputes and slowing industrial activity.

China’s crude import recovery in March offered brief optimism, rising nearly 5% year-on-year. However, the rebound has not been enough to shift the market narrative, particularly with new tariffs and fragile trade negotiations still casting a shadow over forward demand.

Exporters Under Strain as Price Pressure Mounts

Falling oil prices have started to test the financial resilience of emerging market producers. Angola faced a $200 million margin call tied to bond-backed oil financing, while Nigeria is redrafting fiscal plans as revenues fall short. Gulf producers like Saudi Arabia and the UAE are also confronting the reality that current prices are well below the budgetary break-even levels many rely on.

Oil Prices Forecast: Bearish With Episodic Bullish Risks

Despite short-term supply tightening from sanctions and quota enforcement, the broader tone remains bearish. Demand downgrades, trade policy risks, and oversupply concerns continue to dominate. Traders should remain cautious—geopolitical developments could spark temporary rallies, but without a clear demand recovery, sustained upside remains unlikely.

More Information in our Economic Calendar.