Crude oil prices recorded a choppy trading week, underpinned by geopolitical risks and significant supply disruptions. The market closely followed developments in the Russia-Ukraine conflict, where a Ukrainian drone attack on Russia’s Kropotkinskaya pumping station disrupted oil flows via the Caspian Pipeline Consortium (CPC). This pipeline is a vital route for Kazakhstan’s crude exports, and the attack reduced oil flows by 30-40%, potentially withdrawing up to 380,000 barrels per day from global supply?.

In addition to the disruptions in Russia, extreme cold weather in the United States affected oil production. North Dakota’s oil output was reduced by up to 150,000 barrels per day, contributing to tighter supply conditions. These supply-side challenges offered critical support to crude prices, keeping the market buoyant despite broader economic uncertainties?.

EIA and API Data Offer Mixed Market Signals

The latest inventory data from the U.S. Energy Information Administration (EIA) and the American Petroleum Institute (API) provided a nuanced picture of market fundamentals. According to the EIA, U.S. crude oil inventories rose by 4.6 million barrels to 432.5 million barrels, remaining 3% below the five-year average for this time of year. Gasoline inventories fell by 0.2 million barrels, while distillate stocks saw a larger draw of 2.1 million barrels, about 12% below the five-year average?.

The API data aligned closely with the EIA, reinforcing the…

Crude oil prices recorded a choppy trading week, underpinned by geopolitical risks and significant supply disruptions. The market closely followed developments in the Russia-Ukraine conflict, where a Ukrainian drone attack on Russia’s Kropotkinskaya pumping station disrupted oil flows via the Caspian Pipeline Consortium (CPC). This pipeline is a vital route for Kazakhstan’s crude exports, and the attack reduced oil flows by 30-40%, potentially withdrawing up to 380,000 barrels per day from global supply?.

In addition to the disruptions in Russia, extreme cold weather in the United States affected oil production. North Dakota’s oil output was reduced by up to 150,000 barrels per day, contributing to tighter supply conditions. These supply-side challenges offered critical support to crude prices, keeping the market buoyant despite broader economic uncertainties?.

EIA and API Data Offer Mixed Market Signals

The latest inventory data from the U.S. Energy Information Administration (EIA) and the American Petroleum Institute (API) provided a nuanced picture of market fundamentals. According to the EIA, U.S. crude oil inventories rose by 4.6 million barrels to 432.5 million barrels, remaining 3% below the five-year average for this time of year. Gasoline inventories fell by 0.2 million barrels, while distillate stocks saw a larger draw of 2.1 million barrels, about 12% below the five-year average?.

The API data aligned closely with the EIA, reinforcing the narrative of a crude oil build alongside declines in gasoline and distillate stocks. This inventory build was slightly more than expected, adding a cautious tone to the market. However, the drawdowns in gasoline and distillate inventories, driven by seasonal refinery maintenance, provided a bullish counterbalance, suggesting robust demand for refined products.

Giovanni Staunovo, an analyst at UBS, highlighted that while the crude build was higher than anticipated, the modest draw in gasoline and a more substantial draw in distillates helped keep total inventories relatively flat. Following the release of the inventory data, crude futures extended gains slightly, reflecting market resilience?.

OPEC+ and China’s Demand Outlook Limit Upside Momentum

Despite short-term bullish influences, longer-term factors capped the market’s upward potential. OPEC+ maintained its planned production increases, showing no signs of delaying the output hikes scheduled to begin in April. The anticipated additional barrels from OPEC+ and Russia could add to global supply, potentially tempering any significant price gains?.

China’s demand outlook remained a critical variable. As the world’s second-largest oil consumer, China’s pace of economic recovery is pivotal to global crude oil demand. Analysts projected Brent crude prices to average $76 per barrel in 2025, influenced by potential oversupply conditions and global trade tensions?.

U.S. Tariff Policies and Economic Concerns Cloud Demand Projections

Economic policy developments in the U.S. added another layer of complexity to the oil market’s outlook. President Donald Trump’s announcement of hefty tariffs on key global industries, including a 25% duty on automobile imports, raised fears of a slowdown in economic growth. These tariffs could increase consumer goods costs, curb spending, and dampen fuel demand, particularly in Europe and China?.

Bjarne Schieldrop, SEB’s chief commodities analyst, emphasized the risks of disrupted trade dynamics. He warned that a weakened global economy could reduce demand for crude oil, injecting a bearish undertone into the market’s sentiment?.

Weekly Light Crude Oil Futures

Trend Indicator Analysis

The main trend is up according to the weekly swing chart, however, the market is going through a correction of the previous rally from $64.75 to $79.41. Potential support is a pair of pivots at $70.78 to $69.53. This week’s low at $70.12 fell inside this price zone, attracting enough speculative buying and triggering enough profit-taking and short-covering to turn the market higher for the week.

A close over $70.71 on Friday will form a minor closing price reversal bottom. If confirmed next week then look for a possible counter-trend rally into $74.77.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending February 28 is likely to be determined by trader reaction to $70.78 and $69.53.

Bullish Scenario

A sustained move over $70.78 will signal the presence of strong buyers. If this creates enough near-term momentum, we could see a possible retest of $74.77 over the near-term.

Bearish Scenario

A sustained move under $69.53 will indicate the presence of counter-trend sellers. This price level could act like support initially, but if it fails then look out to the downside with $64.75 the next likely target.

Market Outlook: Mixed Signals as Key Support Levels Face a Critical Test

The crude oil market is sending mixed signals as bearish fundamentals clash with a technically intact uptrend. While rising U.S. crude inventories, geopolitical risks, and economic concerns continue to weigh on sentiment, the market is still technically in a correction phase within a broader bullish trend.

For seasoned traders, the pivot zone at $70.78 to $69.53 will be the line in the sand next week. A decisive break below this range could trigger an accelerated move lower, potentially turning the correction into a full-fledged downtrend. Conversely, if this support holds, we could see a short-covering rally that might restore the bullish momentum.

At this point, the playbook involves balancing the bearish narrative with the reality of strong technical support. Expect volatility, and be prepared to act quickly if the market shows its hand early in the week.