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Oil Markets Hover Near Two-Week Highs As Fed Cut Bets Clash With Glut Fears
(MENAFN- The Rio Times) Key Points
Brent and WTI are trading just under recent two-week highs after a modest, grind-higher week.
Traders juggle Fed rate-cut hopes, resilient U.S. inventories and patchy Asian demand while Russian barrels are pushed to wider discounts.
Charts show a short-term rebound inside a broader downtrend, with ETFs and futures positioning hinting at cautious rather than euphoric buying.
Brent futures sit around 63.8 dollars a barrel this morning, with WTI near 60.2, both up roughly 1–1.5 percent over the past week and fractionally firmer overnight.
Dubai swaps hover near 64.3 and Abu Dhabi's Murban trades above 65.5, keeping the main global benchmarks tightly clustered in the low- to mid-60s.
The main support comes from rising confidence that the U.S. Federal Reserve will cut rates by a quarter point this week, with futures putting the odds above 80 percent.
Cheaper money is exactly what cyclical, investment-driven sectors like energy want, and the prospect of a more growth-friendly policy mix has encouraged funds to edge back into crude after months of caution.
Yet even rate-cut optimists know that without disciplined budgets and pro-investment rules, demand alone cannot fix the market's structural surplus.
On the supply side, the last seven days brought another round of geopolitical noise without a decisive break. Ukrainian strikes on Russian oil infrastructure and stalled peace talks underlined the fragility of flows from a major exporter.
At the same time, discounts on Russia's ESPO crude to China have blown out to a record 5–6 dollars under Brent as state refiners step back under U.S. sanctions pressure, showing how politically driven sanctions can distort trade even when barrels still move.
U.S. crude stocks rose slightly but remain about 3 percent below their five-year average, while gasoline inventories jumped, a sign that refiners are comfortable running hard into year-end.
China, for its part, imported a 27-month high of 12.38 million barrels per day in November, more about opportunistic stockpiling on steady prices and sanctioned discounts than a synchronized global boom.
Futures trading stayed busy, with New York volumes above 560,000 contracts earlier in the week even as open interest slipped, suggesting short-term tactical trading rather than big, long-horizon bets.
Oil ETFs tell a similar story. The WTI-linked USO has seen assets grow about 7 percent over the past month even as longer-term flows remain negative, while the Brent-focused BNO picked up around 1.4 million dollars in net inflows over five days but still shows outflows over three months and a year.
Investors are trading the range, not calling a new super-cycle. Technically, the weekly charts for both Brent and WTI still point down: prices trade below declining long-term moving averages and under a broad, year-long descending trendline.
On the daily time frame, however, both contracts have carved out gentle bullish channels since late November, with prices above the 50-day average and MACD momentum turning positive.
Four-hour charts show even steeper short-term uptrends, RSI around 60 and prices pressing resistance near 64 for Brent and 60 for WTI, levels that capped rallies repeatedly in recent months.
The conclusion is a market caught between easy-money hopes and the hard arithmetic of supply. Central banks edging toward looser policy and producers investing in efficient barrels favour a gradual, conservative rebuilding of energy demand and capacity.
But until governments step back from ad-hoc sanctions and quota tinkering that create gluts one month and squeezes the next, oil is likely to stay trapped in a choppy, politics-heavy range rather than committing to a clean trend higher.
Brent and WTI are trading just under recent two-week highs after a modest, grind-higher week.
Traders juggle Fed rate-cut hopes, resilient U.S. inventories and patchy Asian demand while Russian barrels are pushed to wider discounts.
Charts show a short-term rebound inside a broader downtrend, with ETFs and futures positioning hinting at cautious rather than euphoric buying.
Brent futures sit around 63.8 dollars a barrel this morning, with WTI near 60.2, both up roughly 1–1.5 percent over the past week and fractionally firmer overnight.
Dubai swaps hover near 64.3 and Abu Dhabi's Murban trades above 65.5, keeping the main global benchmarks tightly clustered in the low- to mid-60s.
The main support comes from rising confidence that the U.S. Federal Reserve will cut rates by a quarter point this week, with futures putting the odds above 80 percent.
Cheaper money is exactly what cyclical, investment-driven sectors like energy want, and the prospect of a more growth-friendly policy mix has encouraged funds to edge back into crude after months of caution.
Yet even rate-cut optimists know that without disciplined budgets and pro-investment rules, demand alone cannot fix the market's structural surplus.
On the supply side, the last seven days brought another round of geopolitical noise without a decisive break. Ukrainian strikes on Russian oil infrastructure and stalled peace talks underlined the fragility of flows from a major exporter.
At the same time, discounts on Russia's ESPO crude to China have blown out to a record 5–6 dollars under Brent as state refiners step back under U.S. sanctions pressure, showing how politically driven sanctions can distort trade even when barrels still move.
U.S. crude stocks rose slightly but remain about 3 percent below their five-year average, while gasoline inventories jumped, a sign that refiners are comfortable running hard into year-end.
China, for its part, imported a 27-month high of 12.38 million barrels per day in November, more about opportunistic stockpiling on steady prices and sanctioned discounts than a synchronized global boom.
Futures trading stayed busy, with New York volumes above 560,000 contracts earlier in the week even as open interest slipped, suggesting short-term tactical trading rather than big, long-horizon bets.
Oil ETFs tell a similar story. The WTI-linked USO has seen assets grow about 7 percent over the past month even as longer-term flows remain negative, while the Brent-focused BNO picked up around 1.4 million dollars in net inflows over five days but still shows outflows over three months and a year.
Investors are trading the range, not calling a new super-cycle. Technically, the weekly charts for both Brent and WTI still point down: prices trade below declining long-term moving averages and under a broad, year-long descending trendline.
On the daily time frame, however, both contracts have carved out gentle bullish channels since late November, with prices above the 50-day average and MACD momentum turning positive.
Four-hour charts show even steeper short-term uptrends, RSI around 60 and prices pressing resistance near 64 for Brent and 60 for WTI, levels that capped rallies repeatedly in recent months.
The conclusion is a market caught between easy-money hopes and the hard arithmetic of supply. Central banks edging toward looser policy and producers investing in efficient barrels favour a gradual, conservative rebuilding of energy demand and capacity.
But until governments step back from ad-hoc sanctions and quota tinkering that create gluts one month and squeezes the next, oil is likely to stay trapped in a choppy, politics-heavy range rather than committing to a clean trend higher.
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