WTI Crude (CL=F) Jumps Past $70 – Is Oil Set for a Bigger Breakout?

Oil Prices Rebound as Tightening Supply Fuels Market Optimism

After a choppy start to the week, oil prices surged on Thursday, with WTI crude (CL=F) rising above $70 per barrel and Brent crude (BZ=F) trading near $74, as geopolitical risks and fresh U.S. sanctions on Iran and Venezuela tightened supply expectations. With traders watching global demand trends, the question remains whether oil can maintain its upward trajectory or if a renewed downturn is on the horizon.

U.S. Sanctions on Iran and Venezuela Add Supply Pressures

Oil markets turned bullish after U.S. President Donald Trump revoked Chevron's waiver in Venezuela, restricting the company’s ability to export crude to the United States. This move eliminates 240,000 barrels per day from the market, equivalent to a quarter of Venezuela’s total oil production. At the same time, the U.S. ramped up its "maximum pressure" campaign against Iran, targeting its shadow oil fleet and warning global buyers of potential secondary sanctions. These measures have intensified fears of a tightening global supply outlook.

Geopolitical Uncertainty and the Tanker Market – More Supply Disruptions Ahead?

Beyond sanctions, the broader oil trade remains fragile amid rising geopolitical tensions in the Red Sea. Despite signs of easing conflicts in Yemen and the Suez Canal region, major shipping firms are still avoiding Middle Eastern waters, opting for the longer route around the Cape of Good Hope. With fewer available tankers and trade routes shifting, crude transportation costs have surged, adding another layer of volatility to oil prices.

Demand Risks – Will Economic Slowdown Cap Oil’s Upside?

While supply-side factors are pushing crude higher, demand concerns remain a counterbalance. U.S. economic data, including weaker-than-expected GDP growth and slowing durable goods orders, suggest that energy consumption may not be as strong as anticipated. Additionally, China’s recent industrial output data showed signs of stagnation, casting doubt on one of the world’s largest crude importers. If economic conditions deteriorate further, oil bulls may struggle to push prices much beyond current levels.

Technical Analysis – Can WTI Crude (CL=F) Break Above $75?

From a technical perspective, oil prices are approaching key resistance levels.

• WTI crude faces a major hurdle at $72.50-$73, with a breakout above this zone opening the door to $75 and higher.
• On the downside, support sits near $68-$67, with a drop below this level potentially pushing crude toward $65 or lower.
• Brent crude (BZ=F) is testing $74 resistance, with further upside likely if prices break past $75.50-$76.

Traders should watch how oil responds to these critical levels, as a rejection could trigger a correction back to the mid-$60s, while a breakout may lead to another leg higher toward $80.

Oil Market Sentiment – Is WTI Crude a Buy, Sell, or Hold?

Despite short-term demand concerns, oil remains supported by supply-side constraints, geopolitical risks, and shipping disruptions. With fresh sanctions on Venezuela and Iran, and OPEC+ maintaining production cuts, the market remains tilted toward the upside for now. However, if global economic indicators worsen or demand weakens, oil could face renewed selling pressure.

For now, WTI crude remains a buy on dips, with support near $68-$70 offering a potential reentry point for bullish traders. However, if macroeconomic risks accelerate, a retest of $65 or lower is possible, making risk management crucial for anyone looking to capitalize on crude’s next move.

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