Oil News: 200-Day Average in Focus for Crude Oil as Traders Digest Iran Ceasefire

Oil prices forecast remains cautious as market stalls at 200-day average

Light crude futures are holding steady for a second day, locked within Tuesday’s wide range and orbiting the 200-day moving average at $65.12—a pivotal level for long-term direction.

A sustained drop below this threshold would confirm renewed selling pressure, with a break of $64.00 potentially triggering a move toward the 50-day moving average at $61.90. On the upside, maintaining gains above $65.12 could fuel a short-term rally toward $67.44, and possibly $71.20 if momentum builds.

At 10:44 GMT, Light Crude Oil Futures are trading $65.07, up $0.15 or +0.23%.

OPEC+ output strategy adds to trader uncertainty

Fresh comments from Rosneft CEO Igor Sechin introduced new questions around OPEC+ policy. He suggested that planned output hikes could be advanced by as much as a year. This potential shift, coming just weeks after the alliance extended production cuts, complicates oil prices projections. Any earlier-than-expected supply increase could cap upside, especially if global demand fails to accelerate in tandem.

U.S. demand rebounds as inventories drop sharply

Supporting prices, recent EIA data shows robust U.S. fuel consumption. Crude inventories fell by 5.8 million barrels last week—far exceeding forecasts for a 797,000-barrel draw—while gasoline stocks dropped 2.1 million barrels despite expectations for a build.

Notably, gasoline supplied surged to its highest level since December 2021, confirming a delayed but now active driving season. This fundamental strength offers a buffer against geopolitical risk and technical headwinds.

Ceasefire in focus as traders reassess geopolitical risk

Oil markets are treading water as traders digest signals around the Iran-Israel ceasefire. While former President Trump welcomed the truce and hinted at possible sanctions relief for Iran, his comments maintained a hardline tone on Iranian oil exports. Any shift in U.S. enforcement could free up additional barrels, pressuring prices. For now, the geopolitical risk premium is muted but remains a key watchpoint.

Market outlook: Neutral bias with bearish risk below the 200-Day Moving Average

Crude oil remains rangebound, but pressure is building. Strong U.S. demand lends support, yet macroeconomic caution and uncertain OPEC+ intentions weigh on sentiment.

A decisive break below the 200-day moving average at $65.12 would confirm a bearish tilt, with sellers targeting $61.90. Conversely, a hold above this level keeps a neutral-to-bullish case alive, but upside remains capped unless broader supply-demand signals align.

More Information in our Economic Calendar.