Crude oil futures have remained largely stable this week, with prices hovering around the $70 per barrel mark. The market is currently responding to a mix of fundamental drivers, including geopolitical developments, shifts in supply, and evolving demand expectations. Traders are closely watching U.S. policy changes, OPEC+ production strategies, and the ongoing Russia-Ukraine negotiations for clues on the next market move.
A potential peace agreement between Russia and Ukraine remains a critical factor. U.S. President Donald Trump’s direct talks with Russia—without Ukrainian or European Union representatives—could significantly alter global oil flows. Should a peace deal materialize, it might lead to the easing of sanctions on Russian oil, increasing supply in a market already facing rising output from non-OPEC+ producers. The U.S. Energy Information Administration (EIA) projects U.S. oil production to hit a record 13.6 million barrels per day in 2025, which could contribute to additional supply pressure.
How Will Venezuela Sanctions and Strategic Petroleum Purchases Impact Supply?
The abrupt cancellation of Chevron’s license to operate in Venezuela has introduced fresh supply concerns. Chevron, which had been exporting around 240,000 barrels per day of Venezuelan crude—over a quarter of the country’s total oil output—must now halt these operations. This decision not only disrupts Venezuelan oil exports but could also force U.S. refiners to find alternative…
Crude oil futures have remained largely stable this week, with prices hovering around the $70 per barrel mark. The market is currently responding to a mix of fundamental drivers, including geopolitical developments, shifts in supply, and evolving demand expectations. Traders are closely watching U.S. policy changes, OPEC+ production strategies, and the ongoing Russia-Ukraine negotiations for clues on the next market move.
A potential peace agreement between Russia and Ukraine remains a critical factor. U.S. President Donald Trump’s direct talks with Russia—without Ukrainian or European Union representatives—could significantly alter global oil flows. Should a peace deal materialize, it might lead to the easing of sanctions on Russian oil, increasing supply in a market already facing rising output from non-OPEC+ producers. The U.S. Energy Information Administration (EIA) projects U.S. oil production to hit a record 13.6 million barrels per day in 2025, which could contribute to additional supply pressure.
How Will Venezuela Sanctions and Strategic Petroleum Purchases Impact Supply?
The abrupt cancellation of Chevron’s license to operate in Venezuela has introduced fresh supply concerns. Chevron, which had been exporting around 240,000 barrels per day of Venezuelan crude—over a quarter of the country’s total oil output—must now halt these operations. This decision not only disrupts Venezuelan oil exports but could also force U.S. refiners to find alternative heavy crude sources, potentially increasing procurement costs.
Adding to the supply outlook, the U.S. government has signaled intentions to replenish the Strategic Petroleum Reserve (SPR). Trump’s strategy to refill the SPR contrasts with previous reserve releases intended to lower gasoline prices. If these purchases proceed, they could provide a short-term boost to demand, offering some support to crude oil prices.
OPEC+ Faces Market Share Challenge as Non-Member Supply Increases
OPEC+ is facing a critical decision as it considers adjusting production quotas amid increasing global supply. The alliance, including Russia, is currently withholding 5.85 million barrels per day—approximately 5.7% of global demand—to support prices. However, with non-OPEC+ supply expected to exceed demand growth by 500,000 barrels per day in 2025, OPEC+ may need to adapt its strategy to avoid losing market share.
The situation is further complicated by internal pressures within OPEC+. Countries like Kazakhstan, Nigeria, and the United Arab Emirates are boosting production capacity, testing the group’s ability to maintain output cuts. If OPEC+ does not manage this additional supply effectively, its influence over the market could diminish.
Economic Signals Add Complexity to Oil Demand Projections
Broader economic indicators are also influencing crude oil prices. The U.S. economy showed signs of slowing in the fourth quarter, with new tariffs on Canadian and Mexican energy imports potentially reducing industrial demand. An increase in U.S. unemployment claims adds to concerns about economic growth, which could affect oil consumption.
In the global context, China’s demand outlook remains uncertain. Traders are awaiting mid-March policy announcements that could shed light on China’s 2025 growth targets. As one of the world’s largest oil consumers, any signs of weaker economic performance or reduced energy demand from China could significantly impact global crude oil markets.
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. It is currently testing a potential support zone formed by a pair of pivots at $70.78 to $69.53.
This week’s low at $68.36 fell to the bearish side this price zone, but it attracted enough buying on the dip to put it back inside the zone to somewhat stabilize prices.
A close over $70.40 on Friday will form a minor closing price reversal bottom. If confirmed next week then look for a possible counter-trend rally into $73.88. A close under $69.53 will put the market in a weak position with $64.75 emerging as a possible downside target.
Weekly Technical Forecast
The direction of the Weekly Light Crude Oil Futures market the week ending March 7 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 $73.88 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 short-term target.
Market Forecast: Bearish Sentiment Prevails as Supply Pressures Mount
Fundamental factors continue to suggest a bearish outlook for the crude oil market. Rising supply pressures, combined with uncertain demand growth, present challenges to any sustained price rally. While potential SPR purchases and geopolitical developments might provide temporary support, the broader market context indicates limited upside potential without a strong, clear bullish catalyst.
Traders should focus on supply-side developments, particularly concerning Iraqi oil exports and OPEC+’s production decisions. Additionally, geopolitical factors, including U.S.-Russia-Ukraine negotiations and changes in Venezuela’s oil export policies, could influence market sentiment. For now, crude oil prices are likely to remain under pressure, with market participants seeking short-term opportunities driven by clear fundamental signals.
Technically, traders should continue to monitor the reaction to $69.53 and $70.78.
A breakdown through $69.53 could spike prices lower, especially if supported by big selling volume and a bearish story. The bearish pressure may even extend into $64.75 over the short-run. A bullish story and jump in buying volume could spike prices over $70.78 with $73.88 the key target.
Oilprice.com
