On Tuesday, January 7, 2025, Crude oil prices experienced a rebound, reversing previous declines as concerns over tighter supplies from Russia and Iran due to escalating Western sanctions took center stage.
Brent crude futures climbed by 59 cents, or 0.77%, reaching $76.89 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by 42 cents, or 0.57%, to settle at $73.98.
Analysts, such as Giovanni Staunovo from UBS, noted that market participants are beginning to factor in potential supply disruptions in Iranian crude exports to China. This shift in sentiment has led to increased demand for Middle Eastern oil, evidenced by Saudi Arabia’s decision to raise February oil prices for Asia—the first increase in three months.
 In a related development, the Shandong Port Group in China issued a notice banning U.S.-sanctioned oil vessels from its ports, which could restrict these blacklisted vessels from accessing major energy terminals along China’s east coast. This move further underscores the tightening supply dynamics in the global oil market.
 Additionally, colder weather across the U.S. and Europe has spurred heating oil demand, providing additional support for rising prices. However, gains were moderated by global economic indicators. Eurozone inflation accelerated in December, raising concerns that the European Central Bank may slow its pace of interest rate cuts. Analyst Ashley Kelty pointed out that higher inflation in Germany could hinder rapid rate reductions across the Eurozone, while U.S. manufactured goods orders fell in November.
Technical indicators suggest that oil futures are currently in overbought territory, prompting sellers to consider taking profits and potentially capping further price increases. Market participants are also awaiting key data releases this week, including the U.S. December non-farm payrolls report on Friday, which will offer insights into U.S. interest rate policy and the outlook for oil demand.
While crude oil prices have shown resilience amid geopolitical tensions and supply concerns, broader economic factors and technical market conditions may influence future price movements as traders navigate this complex landscape.
Until then, Happy Trading!
Commodity Samachar Securities
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