Oil News: Traders Monitor $75.47 Resistance as Bearish Oil Sentiment Deepens

Crude Oil Prices Decline, Eyeing Key Technical Support Levels

Light crude oil futures fell on Monday, trading below a critical pivot at $75.47, which now acts as a key resistance level. Traders are monitoring whether prices can retest $76.56 or slip further, with major support targets at the 200-day moving average of $70.96 and the 50-day moving average of $70.15. A downside break could deepen bearish sentiment, especially as broader market fundamentals suggest limited upward momentum.

At 11:54 GMT, Light Crude Oil Futures are trading $74.41, down $0.24 or -0.29%.

Geopolitical Risks Shake Markets as Sanctions Threats Recede

Oil prices inched higher earlier in the session after initial nervousness stemming from U.S. sanctions threats against Colombia. The White House reversed its position late Sunday, announcing that Colombia had agreed to accept deported migrants, thereby averting potential oil supply disruptions. Colombia, a key crude exporter to the U.S., sent approximately 41% of its seaborne crude to the U.S. in 2024, according to data from Kpler.

However, market sentiment remains fragile, with traders concerned about the unpredictability of U.S. policy. Bjarne Schieldrop, chief commodities analyst at SEB, noted, “Even if the sanctions didn’t materialize, this still creates nervousness that Trump will strong-arm to achieve his objectives.”

Trump’s Pressure on OPEC and Russia Adds Volatility

President Trump’s call for OPEC to lower oil prices has further unsettled markets. On Friday, Trump criticized OPEC for its role in keeping oil prices elevated, urging the cartel to cut prices to hurt Russia’s finances and force an end to the war in Ukraine. He warned that sanctions or tariffs could target Russia and other OPEC+ nations if the conflict continues without resolution.

Although OPEC+ has not responded directly to these comments, sources within the group pointed to their planned production increases starting in April. Analysts suggest Trump’s rhetoric may also reflect an attempt to boost U.S. oil output and muscle into OPEC’s market share.

Russian Sanctions and Tight Supply Risks Persist

Despite recent easing in supply concerns, oil markets remain vulnerable. Goldman Sachs analysts highlighted that elevated freight rates have allowed non-sanctioned vessels to transport Russian oil, limiting disruptions to Russian production. However, JP Morgan analysts maintain that some risk premium is warranted, with approximately 20% of the global Aframax fleet impacted by sanctions. They emphasized, “A zero risk premium is not appropriate given the leverage sanctions provide in geopolitical negotiations.”

Demand Concerns Mount on Weak Chinese Data

Weaker-than-expected Chinese manufacturing data released Monday added to worries about global energy demand. This development, coupled with easing concerns over immediate supply disruptions, drove both Brent and WTI crude benchmarks to register their first weekly decline in five weeks.

Market Forecast: Bearish Bias with Resistance at $75.47

Crude oil markets remain skewed to the downside as geopolitical risks and soft demand data weigh on sentiment. A sustained break below $75.47 reinforces bearish momentum, with traders eyeing $70.96 as a critical support level. Meanwhile, the lack of immediate action from OPEC+ limits upside potential, even as volatility persists from geopolitical uncertainty.

More Information in our Economic Calendar.