Oil News: Will Crude Break Key $71.63 Resistance or Test Lower Support Next?

Oil Prices Hold Steady in Volatile Week, But Key Resistance Looms

Crude oil prices managed a modest 1.28% gain for the week, but the market’s resilience is being tested. This rise occurred within a critical retracement zone of $69.21 to $71.63, reflecting a cautious balance as traders weigh technical hurdles and macroeconomic pressures. Next week’s price action hinges on whether crude can break through these resistance levels or continue testing support.

Last week, Light Crude Oil Futures settled at $70.38, up $0.89 or +1.28%.

Hurricane Rafael Sparks Oil Rally Before Fading Out

Early in the week, fears of a severe impact from Hurricane Rafael fueled a brief spike in crude prices. Shutdowns in the Gulf of Mexico affected over 22% of U.S. oil output, raising concerns of supply shortfalls. However, as the hurricane weakened and its direction shifted away from key production areas, traders quickly pivoted back to assessing demand fundamentals, especially in light of weakened economic indicators.

China’s Demand Woes Weigh Heavy on Oil Market Sentiment

China, the world’s largest oil importer, remains a source of anxiety for the global oil market. With crude imports down 9% year-over-year in October—the sixth consecutive month of declines—the nation’s demand trajectory is raising red flags. Traders had hoped that China’s recent stimulus efforts would buoy demand, but the measures primarily targeted debt relief for local governments, falling short of a market-wide boost.

Stronger U.S. Dollar Adds Pressure as Trump’s Win Reshapes Market

The U.S. dollar surged following the Trump administration’s election victory, creating headwinds for crude oil by making dollar-denominated prices steeper for international buyers. Traders are also bracing for possible U.S. policy shifts, including interest rate adjustments and a focus on energy independence, both of which could impact global oil flows and domestic production in the months ahead.

Will New Sanctions on Iran and Venezuela Drive a Supply Crunch?

With the Trump administration signaling potential reimplementation of sanctions on Iran and Venezuela, the possibility of supply disruptions looms. A full restoration of “maximum pressure” policies could tighten global oil supplies, removing over a million barrels per day from the market. However, analysts suggest that logistical and political hurdles may delay immediate impacts.

Outlook: Crude Oil Faces Tough Battle to Break Higher Next Week

As the week ahead unfolds, crude oil’s path is clouded by technical resistance and demand-side uncertainties. With support at $69.21 under threat and resistance at $71.63 holding firm, crude may struggle to gain traction without new demand catalysts or a decisive geopolitical shift. For traders, the near-term outlook leans bearish, but any breakthrough in support or demand signals could quickly turn the tide.