Prospect of Peace Weighing on Crude

Crude oil prices have come under fresh selling pressure ahead of the weekend with the futures market firmly in the red through the European morning on Friday. The Israel-Hamas ceasefire continuing to hold, alongside the prospect of an end to the Russia-Ukraine war, is certainly creating headwinds for oil prices. The supply disruption risks linked to those two conflicts have been a key source of support for the market over the last two years with price typically spiking higher in response to news of any escalation in either situation.  With these risks seen as weaker now, oil prices have room to fall further near-term, particularly if we hear reports of any progress in terms of Russia-Ukraine negotiations.

Further EIA Inventories Jump

Away from those situations, crude prices have also come under pressure in the back end of the week from news of a fresh inventories surplus in the US. The EIA recorded an almost 5-million-barrel jump in crude stocks last week, marking a second consecutive week of inventory increases. The data reflects an ongoing weakening of demand in the US which is weighing on trader sentiment. Uncertainty around Trump’s trade tariffs and the burgeoning global trade war are also unsettling traders meaning that crude prices are vulnerable to fresh downside near-term in response to any headlines regarding fresh tariff threats or actioned tariffs from Trump.

Technical Views

Crude

For now, crude prices remain capped by the 72.61 level, around the mid point of the bear channel. While this level holds, focus is on a fresh push lower with 67.45 the next support to watch. To the topside, the channel highs and the 77.64 level will be key near-term resistance to watch.