Introduction ( Crude oil )
This report explores recent changes in the global crude oil market, including China’s unexpected crude oil inventory decline, increased refinery output, geopolitical tensions, and Bank of America’s revised Brent crude price forecast. These factors are shaping global supply, demand, and price movements. Additionally, a technical overview of MCX Crude Oil provides insights into market trends and trading behaviour. Crude oil plays a crucial role in the global economy, influencing industries, trade, and financial markets. Recent events have introduced volatility, with shifts in China’s demand, geopolitical uncertainties, and changing market forecasts impacting oil prices. This report breaks down these developments while also analysing trends in MCX Crude Oil futures.
China’s Unusual Crude Oil Inventory Decline China, the world’s largest oil importer, saw a rare drawdown in crude oil inventories in early 2025—the first in 18 months. The shortfall, estimated at 30,000 barrels per day (bpd), resulted from a 5% drop in imports due to U.S. sanctions on Russian crude shipments and high global oil prices. This suggests refiners held back on purchases due to cost concerns. However, as prices stabilize, import levels are expected to recover.
China’s Growing Refinery Output China’s refinery production rose by 2.1% in January and February 2025, reaching 14.74 million bpd. This increase was driven by higher gasoline and jet fuel demand during the Lunar New Year and the start up of the Shandong Yulong Petrochemical refinery. However, despite rising output, refining margins remain under pressure, especially in the diesel sector, due to a sluggish property market. Independent refiners have also reduced operations due to higher crude import costs.
Geopolitical Risks and Oil Price Fluctuations Tensions in the Middle East continue to affect global oil markets. Recent U.S. military actions against Yemen’s Houthi rebels, in response to attacks on shipping lanes, have raised concerns over supply disruptions. The risk to maritime trade has contributed to higher Brent crude prices. Any escalation could further tighten supply, pushing prices even higher.
Bank of America’s Brent Crude Price Forecast Bank of America recently lowered its 2025 Brent crude oil price forecast by $5 per barrel, citing expectations of weaker demand. This reflects broader economic concerns, including slowing global growth and policies aimed at reducing fossil fuel reliance. The downward revision suggests potential shifts in investment and production strategies across the oil sector.
Symmetrical Triangle Formation Crude oil is currently forming a symmetrical triangle pattern, indicating a period of consolidation before a potential breakout. This pattern is characterized by converging trendlines, suggesting that buying and selling pressures are nearing equilibrium. Traders are closely watching for a breakout on either side, which could trigger a sharp price movement. If crude oil breaks above the upper resistance line, we may see a strong bullish rally, while a breakdown below support could signal a bearish trend. This pattern is crucial for short-term traders looking to capitalize on breakout movements.
On the weekly timeframe, crude oil has been in a downward trend, suggesting that sellers currently have the upper hand over buyers. While the price is attempting to bounce back from a key support level, the broader trend remains bearish. Traders are keeping a close eye on whether this rebound gains strength or if selling pressure takes over again, potentially driving prices lower. Although the price is currently attempting a reversal from a key support level, the overall trend remains bearish. Traders are watching closely to see if this rebound gains momentum or if selling pressure resumes, pushing prices lower. This phase is crucial in determining whether crude oil will establish a new trend direction.
Conclusion:
The crude oil market is currently shaped by a mix of economic, geopolitical, and regulatory factors. China’s inventory drawdown and refinery growth reflect shifting demand trends, while geopolitical risks continue to create supply uncertainty. The downward revision of Brent crude price forecasts highlights changing market sentiment. Meanwhile, technical indicators suggest continued volatility in MCX Crude Oil trading. The symmetrical triangle pattern in crude oil signals an imminent breakout, and market participants should prepare for potential price swings in the near term. As the market evolves, businesses and investors must stay adaptable and informed to navigate these changes effectively.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
Also Read: Gold Hits Record High: What’s Next & Where to Buy? , Nifty turns negative, Bears will have upper hand
Recommended Read: India’s Semiconductor Surge: Powering the Future of Electronics!
Want Help On Your Trades ?
Chat with RM
