Brent Crude futures (OIL) are down 0.5%, attempting to stabilize after yesterday’s sell-off, driven by rising hopes for a Ukraine peace deal and higher-than-expected U.S. oil stockpiles reported by the EIA. Additionally, weak Chinese macroeconomic data continues to signal an economic slowdown and declining consumption trends, raising uncertainty over potential PBoC stimulus measures. The overall outlook for oil demand remains uncertain.
Higher U.S. crude inventories suggest growing oversupply concerns, exacerbated by a more hawkish Federal Reserve stance on interest rates, which pressures the global oil demand outlook. Furthermore, the EIA has raised its forecast for U.S. crude production to 13.59 million barrels per day (bpd) in 2025, highlighting potential long-term supply risks.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appFor now, OECD oil demand growth in 2025 is projected at just 0.1 mb/d, while non-OECD countries are expected to see demand rise by 1.3 mb/d, with further growth anticipated into 2026. Despite a market reaction pointing to lower oil prices amid U.S.-Russia discussions on Ukraine’s future, traders are pricing in the probability of a peace deal rather than the deal itself, as Moscow-Kyiv relations remain highly uncertain. If a peace agreement is reached, concerns over a tight Russian oil supply could ease, with Asian shipping stocks already slumping on fears of declining oil freight rates.
OIL (H1 interval)
The $73 per barrel level remains a key technical support for OIL. A break below this zone could push Brent Crude below the critical $70 mark. For now, demand remains muted at the $73 level. With rising US crude inventories and production, a cautious Fed, and easing geopolitical tensions, OIL faces multiple downside risks. Falling below $70 is not out of the table if the peace deal in Ukraine will happen, potentially easing US sanctions on Russian oil. Traders will watch today PPI report from the US at 1:30 PM GMT.
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
