.png)
Crude Higher This Week
Oil prices have started the year on a strong footing. Despite the current strength in USD, crude futures have pushed higher by almost 5% over the first few days of 2025 trading. Driven by signs of better demand, stronger fundamentals and supply concerns linked to Russia and Iran, current sentiment among crude traders looks nicely bullish at the start of the year. The question now, however, is how much of an impact is a stronger US Dollar going to have? Particularly if we see fresh strength in Friday’s jobs data.
Supply & Demand
Recent data shows that OPEC+ production continued to fall last month. At a time when Russian and Iranian output is being limited due to sanctions, this news is helping underpin the near-term outlook. Meanwhile, speculation that China will announce fresh stimulus measures this year are also helping bolster sentiment. Weakened demand out of China has been a major headwind for crude prices over the last six months. Any sign that this situation is improving will certainly be a big bullish driver for crude prices.
USD Impact
On the Dollar front, traders are looking ahead to Friday’s jobs data and its implications for March easing. If data comes in inline with forecasts or above, this is likely to reinforce the view that the Fed will hold rates steady through March, likely limiting the rally in crude as USD breaks out. However, any downside surprises should keep March easing on the table, allowing crude to rally as USD softens.
Technical Views
Crude
The rally in crude has seen the market breaking out above the 72.61 level which had capped price action since October. With momentum studies bullish, focus is on a continuation higher and a test of the 77.64 level next and bear channel highs.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.