Crude Oil price took a dip on Tuesday, January 14, 2025, pulling back from a recent four-month high that was spurred by new U.S. sanctions on Russian oil exports. As of 08:45 ET (13:45 GMT), Brent Oil Futures were down 0.9% at $80.32 a barrel, while Crude Oil WTI Futures for March fell by 0.8% to $76.69 a barrel.
Dollar Dynamics and Inflation Influences
The U.S. dollar also eased after the Producer Price Index (PPI) showed a smaller-than-expected increase of just 0.2% in December, compared to the anticipated 0.4%. On an annual basis, the PPI rose to 3.3%, slightly below the expected 3.5% but an increase from the previous month’s figure of 3.0%. The upcoming Consumer Price Index (CPI) report is being closely watched, as any significant rise could impact the Federal Reserve’s plans for interest rate cuts this year.
When the dollar strengthens, oil becomes more expensive for buyers using other currencies, which can dampen demand in non-dollar-denominated economies and put downward pressure on global oil prices. Conversely, during periods of dollar weakness, speculative investments in commodities like oil tend to rise.
Sanctions Impacting Supply
The recent rally in oil prices was primarily driven by the Biden administration’s comprehensive sanctions targeting major Russian oil producers such as Gazprom Neft and Surgutneftegas, along with 183 vessels involved in transporting Russian oil. These sanctions are expected to significantly disrupt Russian oil exports, forcing major importers like China and India to seek alternatives from regions such as the Middle East and Africa. Market analysts have noted that these sanctions could lead to tighter supply conditions and potentially increased demand from alternative sources. Some forecasts suggest that Russia may need to price its crude below $60 per barrel to remain competitive in the global market.
Technical Outlook – Crude oil Price
Crude oil continued to rise yesterday, it would be better to wait a bit for new levels. Buying on dips is advisable but wait for profit booking. There is a lot of activity in the market, so big movements will be seen. Resistance zone in crude oil is 7055—7088 and intraday support is 6710—6661. Wait a bit.
Market Outlook
According to Bernstein analysts, new sanctions could push Brent crude prices up to $90 per barrel for prompt delivery if supply disruptions continue. Industry participants are keenly observing updates from OPEC+ regarding potential supply adjustments to stabilize markets amid winter demand fluctuations. As traders navigate these developments, the interplay between geopolitical tensions, currency fluctuations, and economic indicators will continue to shape the oil market landscape in the coming weeks.
Until then, Happy Trading!
Commodity Samachar Securities
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Also Read: Price Drops, Demand Rises—Natural Gas in Focus , Crude Oil Price Surge: China’s & India’s Cuts—What’s Next?
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