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Oil Prices Hold Steady As Market Faces Slowing Demand And Rising Supply
(MENAFN- The Rio Times) Trading data from TradingView revealed oil markets trading relatively flat early Wednesday as global economic concerns continue to weigh on energy prices.
Brent crude futures hovered at $63.435, dropping 0.28% while WTI crude futures edged up 0.24% to $59.59 by 0637 UTC. Both benchmarks declined 0.3% during Tuesday's session.
Market participants remain cautious about the impact of shifting U.S. trade policies on global economic growth. The recently announced tariff exemptions for oil, gas, and refined products provided limited relief to the energy sector.
Fundamental outlooks continue to pressure prices as demand growth forecasts face significant downgrades. The International Energy Agency cut its global oi demand growth forecast to 730,000 barrels per day for 2025.
This major revision represents a 300,000 bpd reduction from previous projections and signals the slowest growth rate in five years. The agency warned that oil markets should "buckle up" for volatility as trade negotiations unfold during the 90-day tariff reprieve.
Global oil supply increased by 590,000 bpd to 103.6 million bpd in March, exceeding demand and contributing to bearish sentiment. Non-OPEC+ producers led both monthly and annual production gains, challenging OPEC's market balancing efforts.
Kazakhstan's output reached a record 1.8 million barrels daily following the Tengiz oilfield expansion. Eight OPEC members plan to triple their scheduled production increases for May, potentially adding 411,000 bpd to global supply.
Crude Oil Market Faces Pressure
China's crude imports rose approximately 5% year-on-year in March, reaching their highest levels since August 2023. Iranian oil shipments contributed significantly to this increase despite looming tighter U.S. sanctions.
Major financial institutions have revised price forecasts downward in response to changing market conditions. HSBC reduced its Brent forecast to $68.5 per barrel for 2025, while Goldman Sachs projects $66 for the same period.
More pessimistic outlooks suggest Brent could trade between $40-60 if trade tensions escalate further. Technical indicators show Brent crude remains in a consolidation pattern following April's significant price drop.
The market trades above key support at $63 but faces resistance around $66.42. WTI crude has rebounded to around $60 after breaking long-term support earlier this month.
Oil-related ETFs showed mixed performance Tuesday, with the United States Oil Fund closing down 0.27%. Increased volume in inverse oil ETFs indicates some traders anticipate further price declines.
Market focus now shifts to upcoming inventory reports from the American Petroleum Institute and Energy Information Administration for direction.
Traders await signs of demand recovery or supply adjustments that could stabilize prices. Until then, oil markets remain vulnerable to trade policy developments and shifting economic growth expectations.
Brent crude futures hovered at $63.435, dropping 0.28% while WTI crude futures edged up 0.24% to $59.59 by 0637 UTC. Both benchmarks declined 0.3% during Tuesday's session.
Market participants remain cautious about the impact of shifting U.S. trade policies on global economic growth. The recently announced tariff exemptions for oil, gas, and refined products provided limited relief to the energy sector.
Fundamental outlooks continue to pressure prices as demand growth forecasts face significant downgrades. The International Energy Agency cut its global oi demand growth forecast to 730,000 barrels per day for 2025.
This major revision represents a 300,000 bpd reduction from previous projections and signals the slowest growth rate in five years. The agency warned that oil markets should "buckle up" for volatility as trade negotiations unfold during the 90-day tariff reprieve.
Global oil supply increased by 590,000 bpd to 103.6 million bpd in March, exceeding demand and contributing to bearish sentiment. Non-OPEC+ producers led both monthly and annual production gains, challenging OPEC's market balancing efforts.
Kazakhstan's output reached a record 1.8 million barrels daily following the Tengiz oilfield expansion. Eight OPEC members plan to triple their scheduled production increases for May, potentially adding 411,000 bpd to global supply.
Crude Oil Market Faces Pressure
China's crude imports rose approximately 5% year-on-year in March, reaching their highest levels since August 2023. Iranian oil shipments contributed significantly to this increase despite looming tighter U.S. sanctions.
Major financial institutions have revised price forecasts downward in response to changing market conditions. HSBC reduced its Brent forecast to $68.5 per barrel for 2025, while Goldman Sachs projects $66 for the same period.
More pessimistic outlooks suggest Brent could trade between $40-60 if trade tensions escalate further. Technical indicators show Brent crude remains in a consolidation pattern following April's significant price drop.
The market trades above key support at $63 but faces resistance around $66.42. WTI crude has rebounded to around $60 after breaking long-term support earlier this month.
Oil-related ETFs showed mixed performance Tuesday, with the United States Oil Fund closing down 0.27%. Increased volume in inverse oil ETFs indicates some traders anticipate further price declines.
Market focus now shifts to upcoming inventory reports from the American Petroleum Institute and Energy Information Administration for direction.
Traders await signs of demand recovery or supply adjustments that could stabilize prices. Until then, oil markets remain vulnerable to trade policy developments and shifting economic growth expectations.
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