Oil Tests $60 Support as US Storm Cuts 2mn bpd, Limiting Supply Pressure
Oil prices edged lower on Tuesday as markets weighed the gradual return of supply from Kazakhstan against fresh disruptions elsewhere...
Quick overview
- Oil prices dipped as Kazakhstan resumes production, easing short-term supply shortages.
- Severe winter weather in the US has disrupted oil production, limiting price declines.
- Geopolitical tensions and OPEC+'s output strategy continue to keep supply tight.
- WTI crude remains above $60, indicating a bullish trend with key resistance levels identified.
Oil prices edged lower on Tuesday as markets weighed the gradual return of supply from Kazakhstan against fresh disruptions elsewhere. Kazakhstan’s energy ministry confirmed that production at the country’s largest oilfield is resuming, while the CPC pipeline has restored full loading capacity at its Black Sea terminal following maintenance.
The restart helps ease short-term supply shortages and puts some pressure on crude prices, especially as traders review immediate market availability. Some have also begun taking profits after heating oil prices surged during the recent cold snap.
However, price declines are limited for now. Early signs show that production is coming back slowly, so the effect on global supply is not immediate.
US Winter Storm Cuts Up to 15% of Output
Severe winter weather in the US has helped limit price drops by disrupting both oil production and refining. Analysts estimate that up to 2 million barrels per day, or about 15% of US output, was shut down over the weekend as freezing temperatures strained energy systems.
Some Gulf Coast refineries have also faced problems, which has raised concerns about short-term fuel supplies. Because of this, analysts expect US crude inventories to fall in the next few weeks, which could help steady prices even as supply improves in other areas.Geopolitical Risk and OPEC+ Keep Supply Tight
Geopolitical tensions are still adding a risk premium to oil prices. The arrival of US naval forces in the Middle East has increased uncertainty about supply, reminding traders that bigger risks remain.
At the same time, OPEC+ is expected to maintain its pause on output increases at its February 1 meeting. The group’s stance limits additional barrels entering the market, reinforcing a cautious outlook even as some supply disruptions begin to ease.
WTI Crude Oil Price Forecast: USOIL Holds $60 as Bulls Defend Rising Trendline
From a technical perspective, WTI crude trades near $60.90, holding above a rising trendline that has guided prices higher since early January. Recent candlesticks show small bodies and limited wicks, pointing to consolidation rather than distribution.
Prices are still moving within an upward channel, with higher lows above $60.10. The 50-day moving average is above the 200-day average near $59.50, which supports the overall bullish trend. The RSI is in the mid-50s, showing steady momentum without being overbought.
Key resistance levels are at $61.40, then $62.35 and $63.38, where previous highs stopped rallies. The Fibonacci retracement shows that $60.15 to $59.80 is an important demand zone.
Trade idea: Consider buying around $60.20, aiming for $62.30, with a stop below $59.40.
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