Crude Oil Surges Past Key Levels!
Geopolitical Tensions & Supply Shocks Fuel Bullish Momentum
New York (Energy News) – West Texas Intermediate (WTI) crude oil ended the week on a positive note, climbing 2.71% to settle at $63.66 per barrel. This marks a recovery above its 52-week moving average of $63.36, a technical signal that has shifted market sentiment towards a more bullish outlook after several unsuccessful rallies.
However, crude prices stalled just short of a key resistance level at $64.56. Market analysts believe that a decisive break above this barrier could open the way for further gains, targeting $68.70 and the mid-July peak of $69.69.
Ukraine Conflict and Sanctions Push Supply Fears Higher
Geopolitical tensions resurfaced strongly in energy markets last week. Ukraine launched strikes on a major Russian refinery and the Unecha pumping station along the Druzhba pipeline, disrupting flows of crude oil to Hungary and Slovakia.
At the same time, Russia dismissed peace negotiations without preconditions, while the United States imposed a 25% tariff on Indian imports linked to discounted Russian crude purchases. These developments are fueling concerns over supply disruptions across Eastern Europe, prompting traders to rebuild a risk premium into crude pricing.
U.S. Inventory Draw Adds to Bullish Momentum
On the supply-demand front, U.S. crude inventories recorded a sharp drawdown of 6 million barrels, far exceeding market expectations. This signals resilient demand, though experts noted that robust refinery activity and stronger export flows may have contributed to the decline.
Meanwhile, a slowdown in U.S. rig operations and weak economic data from Europe—particularly Germany’s -0.3% GDP in Q2—have added uncertainty to the demand outlook, especially for European crude buyers.
Technical Levels: WTI Faces Crucial Test
Chart patterns suggest that WTI crude is now trading in a highly sensitive zone. Holding above the 52-week average of $63.36 keeps bullish momentum intact, but a solid close above $64.56 is required to confirm a breakout.
Should this occur, upside targets include $68.70 and $69.69. On the downside, traders are watching the support range between $63.31 and $60.26. A drop below $61.12 would raise red flags, potentially pulling crude prices toward the deeper support zone of $50.36–$51.18.
Market Outlook: Bulls Hold the Edge, But Breakout Needed
With U.S. stockpiles shrinking and geopolitical risks escalating, crude oil prices have fundamental and technical reasons to stay firm. However, unless prices convincingly break above $64.56, WTI may continue to trade in a choppy, range-bound pattern.
For now, as long as oil remains above its long-term average, the bulls are holding control of the market.
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