Oil News: Will Rising Supply and Weak Demand Keep Prices Under Pressure?

Oil Market Stalls as Geopolitical Risks and Supply Growth Clash

Crude oil prices remained range-bound last week as traders balanced geopolitical risks with rising supply. While strong fuel demand provided support, bearish fundamentals—including increased U.S. production, OPEC+ supply flexibility, and economic uncertainty—kept gains in check.

With conflicting forces in play, the market struggled to find direction. Geopolitical developments, OPEC+ policy decisions, and demand signals will be key in shaping oil’s next move.

Last week, Light Crude Oil Futures settled at $67.18, up $0.14 or +0.21%.

Can OPEC+ Prevent Oversupply?

OPEC+ remains in focus as its planned April production hike raises concerns over a potential supply glut. While the group has reaffirmed its commitment to increasing output, Russian officials suggested they may reassess if prices remain weak.

Some OPEC+ members have already ramped up production, while U.S. crude output is expected to climb further this year. With supply on the rise, traders are watching for signs of an OPEC+ policy shift, particularly if demand weakens or inventories build.

Is Demand Holding Up Against Economic Headwinds?

U.S. fuel consumption remains solid, with gasoline and distillate stockpiles declining more than expected last week. This indicates resilient consumer demand, supporting crude markets despite broader economic uncertainty.

However, global demand concerns persist. Weak manufacturing data from China and ongoing trade tensions have tempered bullish sentiment. The U.S. has also imposed new tariffs on key imports, raising fears of slower industrial activity. If economic conditions soften further, demand growth could slow, limiting oil’s upside.

Will Geopolitical Uncertainty Disrupt Supply?

Russia-Ukraine ceasefire discussions added to market volatility last week. While Russia showed tentative support for a U.S.-brokered truce, lingering uncertainties suggest any resolution remains distant. Meanwhile, U.S. sanctions on Russian energy transactions and China’s reduced crude imports from Russia are complicating global supply flows.

Elsewhere, geopolitical tensions involving Iran and Middle Eastern producers remain a wildcard. While risks could trigger short-term supply disruptions, fundamentals suggest the market remains well supplied for now.

Market Outlook: Cautious Sentiment with Downside Risks

With rising U.S. output, OPEC+ supply flexibility, and economic uncertainty weighing on demand forecasts, the oil market remains under pressure. While geopolitical risks may spark occasional rallies, sustained gains appear unlikely unless a major supply disruption occurs.

Traders should expect choppy conditions as the market digests supply and demand signals. OPEC+ policy shifts, economic data, and geopolitical developments will dictate near-term direction, but for now, the outlook remains neutral to bearish.

Technically, the trend is up according to the swing chart, but momentum has been trending lower since the 52-week moving average at $71.13 failed to hold six-weeks ago.

Support is a series of bottoms at $64.75, $61.58 and $59.52. The price action the last two-weeks suggests that traders may have found a value area, leading to a led-up in selling pressure. Nonetheless, gains are likely to be capped by a pair of pivots at $69.53 and $70.78, and of course, the 52-week moving average.

We’re likely to remain in “sell the rally” mode until there is a decisive close above the 52-week moving average.

More Information in our Economic Calendar.