WTI Crude Oil Set for 3% Weekly Gain Amid Supply Risks and China Stimulus

WTI crude oil prices are stabilizing around $69.99 as the market edges toward its first weekly gain of over 3% since November.

Written by: Arslan Butt • Friday, December 13, 2024 • 2 min read

• Last updated: Friday, December 13, 2024

WTI crude oil prices are stabilizing around $69.99 as the market edges toward its first weekly gain of over 3% since November.

Concerns over tightening sanctions on Iran and Russia have rekindled supply fears, bolstering prices. Meanwhile, China’s recent stimulus measures have sparked hopes for increased demand in the world’s second-largest oil consumer.

Analysts note that crude prices have successfully defended the key technical level of $71, with traders closely watching for stronger recovery signals.

According to the International Energy Agency (IEA), global oil demand growth is expected to rise by 1.1 million barrels per day (bpd) in 2025, up from last month’s forecast of 990,000 bpd. However, non-OPEC+ nations are projected to increase supply by 1.5 million bpd, which could cap price gains.

“With a fairly balanced outlook, prices may stay range-bound for now,” remarked Warren Patterson, ING’s head of commodities research.

China and Refinery Margins in Focus

China’s crude imports rose annually for the first time in seven months this November, driven by lower prices and restocking efforts. Independent refiners, rushing to utilize their quotas, have contributed to elevated imports. Additionally, refiners are tapping Saudi Arabia for cheaper supply.

However, analysts warn that current refinery margins may not justify the large November import volumes. While the short-term demand outlook appears favorable, oversupply concerns linger due to robust output from countries such as Brazil, Canada, and Guyana.

Key figures highlight the global balance:

China Stimulus Impact: Increased demand projections for 2025.
IEA Forecast: 1.1 million bpd demand growth against 1.5 million bpd new supply.
U.S. Shale Growth: Goldman Sachs anticipates a 600,000 bpd increase in 2025.

WTI Crude Oil Price Chart - Source: Tradingview — WTI Crude Oil Price Chart – Source: Tradingview

Technical Levels to Watch

Technically, WTI crude remains within an ascending channel, supported by the pivot at $69.38 and the 50 EMA at $69.87. Resistance levels are marked at $70.74, $71.47, and $72.13, while support levels sit at $68.67 and $67.89.

The RSI at 60.83 suggests prices are nearing overbought territory but still have room for upward momentum.

Traders should watch for a breakout above $70.74 for bullish confirmation, while a fall below $69.38 may signal a bearish reversal targeting lower support zones.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.