- Oil prices hover around $70.00 for the second consecutive day.
- Traders are conflicted between short-term upside potential and a long-term bearish outlook.
- The US Dollar Index stands at 107.00, its highest level in over two weeks.
Crude Oil is stuck around $70.00 on Friday, with market participants hesitant to add to the recent rally. The OPEC+ report supported price gains earlier in the week, but concerns about 2025 projections under
President-elect Donald Trump, alongside increased US oil drilling and an already oversupplied market, are limiting optimism. The US Dollar is benefiting from interest rate differentials between the US, China, and Europe, bolstering the Greenback as we approach the Federal Reserve’s meeting next week.
Oil News and Market Movers:
- Abu Dhabi National Oil Co. (Adnoc) has reduced crude allocations to some Asian customers, according to Bloomberg.
- Weak fundamentals are expected to pressure oil prices in 2025, as a supply glut could overshadow the impact of geopolitical risks, sanctions, and OPEC+ cuts.
- US oil suppliers typically increase exports in December to lower tax bills, but analysts suggest that low Gulf Coast inventories may disrupt this trend.
Oil Technical Analysis:
Crude Oil prices may see limited upside, with any rallies expected to be short-lived due to year-end profit-taking and potential US policy changes favoring increased oil drilling.
The 55-day Simple Moving Average (SMA) at $70.06 is a key level to watch for support. Resistance is expected around $71.46 and the 100-day SMA at $71.12, with $75.27 as a pivotal level beyond that.
On the downside, $67.12 remains the first solid support, followed by the 2024 low at $64.75 and the 2023 low at $64.38.
