WTI Crude Oil Set to Climb Amid Strong U.S. Data and 2025 Market Optimism
Oil prices rose on Tuesday, reversing Monday’s losses, as WTI crude consolidated around $69.45.
The recovery comes amid light trading volumes ahead of the Christmas holiday and a cautiously optimistic market outlook for the short term. Analysts at FGE suggest that prices will likely remain range-bound as paper market activity slows during the holiday season, with participants waiting for clarity on 2024 and 2025 oil market balances.
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The FGE report also highlighted that any potential supply disruptions could spark upward price movements due to the short positioning in the paper market. These sentiments reflect growing consensus among analysts that the market may see increased volatility due to limited liquidity.
Positive U.S. Economic Signals Support Oil Demand
Strong U.S. economic indicators continue to provide a supportive backdrop for oil prices. In November, new orders for U.S.-manufactured capital goods surged, driven by rising machinery demand. Meanwhile, new home sales rebounded, underscoring the resilience of the world’s largest oil-consuming economy.
Analysts anticipate further insights from crude oil inventory data, with the American Petroleum Institute’s report expected on Tuesday and the Energy Information Administration (EIA) report due Friday. Preliminary estimates suggest a drawdown of 2 million barrels in U.S. crude inventories for the week ending December 20, signaling healthy demand in the short term.
Neil Crosby, assistant vice president of oil analytics at Sparta Commodities, noted shifting dynamics in the market. He pointed out that the EIA’s short-term energy outlook projects a supply draw for 2025, even as OPEC+ barrels gradually return to the market.
WTI Crude Oil Technical Analysis
WTI crude oil is consolidating around $69.45, showing mild upward momentum in holiday-thinned trading. The price is testing resistance at $69.58, with further levels at $70.75 and $71.37. On the downside, key support lies at $68.89, $68.43, and $67.89.
The RSI at 51.91 reflects neutral momentum, while the 50 EMA at $69.50 aligns with the pivot point, suggesting potential breakout opportunities. A sustained break above $69.58 could signal bullish momentum toward $70.75, while a dip below $68.89 might test lower support levels.
Key Takeaways:
- WTI crude stabilizes near $69.45 amid cautious holiday trading.
- Strong U.S. economic data underpins demand outlook.
- Breakout above $69.58 signals bullish potential, while failure below $68.89 could trigger further declines.
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