Oil Prices Heat Up as U.S. Stockpiles Drop and Russian Sanctions Shake Markets
Oil prices steadied on Wednesday, with WTI Crude Oil trading at $77.69, up 0.17%.
The price action followed a dip in U.S. crude stockpiles and looming concerns over global supply disruptions caused by sanctions on Russian oil tankers. The American Petroleum Institute (API) reported a significant drop of 2.6 million barrels in U.S. crude oil inventories for the week ending January 10. This exceeded market expectations, offering support to oil prices after Tuesday’s decline.
Despite the drop in crude inventories, gasoline and distillate stocks rose by 5.4 million barrels and 4.88 million barrels, respectively. However, ING analysts noted that inventories at Cushing, Oklahoma—the delivery hub for WTI futures—remain historically low, bolstering bullish sentiment for crude oil.
Sanctions and Demand Projections Shape Market Sentiment
The U.S. Treasury’s sanctions on Russian oil producers and its shadow fleet of tankers have also added a layer of uncertainty to global supply chains. Analysts expect these sanctions to disrupt the flow of Russian oil, further tightening the market.
However, Tuesday’s report from the U.S. Energy Information Administration (EIA) predicted that global oil demand would average 104.1 million barrels per day in 2025, slightly lower than its previous forecast of 104.3 million barrels per day.
Additionally, the EIA projected that Brent crude oil prices would decline by 8% to an average of $74 per barrel in 2025, before dropping further to $66 in 2026. WTI prices are forecasted to average $70 per barrel in 2025, falling to $62 in the subsequent year. These predictions reflect expectations of oversupply as production outpaces demand.
Technical Analysis: WTI Crude Oil Breakout Potential
WTI Crude Oil prices have broken above the $77.34 pivot point, maintaining an upward trajectory within a rising channel. The 50-day Exponential Moving Average (EMA) at $76.90 provides critical support, further solidifying bullish momentum.

Key resistance levels include $79.10, $80.06, and $80.87. A confirmed breakout above $79.10 could pave the way for a rally toward these targets. On the downside, immediate support is located at $77.34, with additional levels at $76.05 and $75.10. A breakdown below $77.34 would invalidate the bullish trend, potentially leading to short-term selling pressure.
Key Insights:
Stockpile Impact: U.S. crude stockpiles fell by 2.6M barrels, exceeding market expectations and supporting prices.
Resistance Levels: Key targets include $79.10, $80.06, and $80.87, indicating potential for further gains.
Bearish Risks: A break below $77.34 could signal renewed downside pressure, testing support at $76.05.
This combination of tightening supply, sanctions on Russia, and mixed demand projections will likely keep oil markets volatile in the coming weeks. Traders should remain cautious, with a close eye on inventory reports and geopolitical developments.
