China, the world’s largest importer of crude oil, reported a sharp contraction in manufacturing activity in January. The official PMI fell to 49.1, a five-month low, underscoring a slowdown in manufacturing activity. Weaker-than-expected data raised concerns about oil demand growth in China, where factory activity continues to slow amid deflationary pressures and weak domestic consumption.
Meanwhile, China’s independent refineries face operational challenges due to tougher government policies and U.S. sanctions on Russian crude. As a result, many refineries have reduced or halted production, further uncertain the demand outlook.
U.S. Weather and Broader Market Sentiment Adding to Pressure
In the United States, warmer-than-expected temperatures are discouraging demand for heating fuel, which rose during previous cold weather. Broader financial markets are also contributing to bearish sentiment, as volatility in US technology stocks and uncertainty over tariffs and sanctions weigh on market confidence. Analysts stress that these factors are likely to keep crude prices volatile in the short term.
Oil Price Forecast: Bearish Expectations Reign
Given the current market conditions, crude oil prices are likely to remain under pressure. Bearish sentiment is driven by weak economic data from China, weak fuel demand in the United States, and uncertainty over sanctions and trade policies.
While supply disruptions in Libya provide some support, they are unlikely to outperform broader demand concerns. Traders should closely monitor key technical levels and geopolitical developments as the market navigates this challenging environment.
The latest sanctions target tankers carrying about 42 percent of Russian seaborne oil exports, mainly to China, according to analytics firm Kepler, although sanctioned tankers are gradually unloading oil in China and India during the waiver period.
Oil prices hit by supply disruptions and weak demand
Crude oil news today shows light crude oil futures rising in early trading on Tuesday. However, the movement reflects more of a technical revival than a new interest in purchases. While the broader trend remains bullish, the momentum has shifted to the downside, leaving traders cautious. The market is currently confined to a range, focusing on key technical levels.
If prices break through the $72.38 level, traders could see a resumption of the downtrend, initially targeting $71.51, followed by the 200-day moving average at $70.94. There is resistance at the 50% tipping point at $75.47, providing some bullish potential. These levels are likely to guide trading activity in the short term. Light crude oil futures are trading at $73.86, up $0.69 or +0.94%.
Supply disruptions in Libya provide support
Crude oil prices have received some support from disruptions in Libyan oil exports. Protests at the ports of Sidra and Ras Lanuf have halted crude loading, threatening some 450,000 barrels per day of exports. Analysts warn that if the disruption spreads, it could jeopardize Libya’s production capacity of 1.4 million barrels per day, a scenario that would reduce global supply.
Despite this, other bearish factors have tempered upward pressure on prices, including weakening demand signals from key markets such as China and the US.
Russia’s loaded oil trade in March, Asia, the biggest buyer, halted as a large price gap emerged between buyers and sellers in China following rising costs for chartering tankers unaffected by U.S. sanctions, according to traders and shipping data.
Washington imposed new sanctions on Jan. 10 targeting Russia’s oil supply chain, causing tanker shipping prices to soar as some buyers and ports in China and India avoided sanctioned vessels.
Oil and Silver Price Forecast: Opportunities and Strategies
The price of Brent crude is recovering from the main support, which consists of August, late October-November lows of $76.08 to $74.90 per barrel. While this zone supports the price, the price is expected to rise towards the $81.00 zone. The 200-day SMA at $77.91 represents the first bullish target.
A drop across the early August low of $74.90 will not break through the 55-day SMA at $74.45.
The price of silver looks heavy
Spot silver rose from last week’s high of $31.02 an ounce, and slipped through the 200-day SMA at $30.08 that now acts as resistance, along with the 55-day SMA at $30.39. The October-January downtrend line at $30.90 also provides resistance.
A drop across Monday’s low of $29.70 would put the mid-January low of $29.50 to the test..
Wheat futures prices slide towards key support level as Chicago Mercantile Exchange wheat futures retreat in the first month towards the main support zone, which consists of November-January lows, at 529’2 to 526’0. We expect this support zone to continue. Slight resistance can be observed along the 55-day SMA at 549’2.
In China, recently sanctioned tankers face delays in unloading oil despite meeting exemption requirements. Three of them offloaded Russian Espoo and Sokol crude from Jan. 15-17, while the tanker Olea unloaded its cargo at Shandong’s Yantai port on Sunday after carrying its cargo Espoo for almost three weeks, according to London Stock Exchange Group data and sellers in China following rising costs for chartering tankers unaffected by U.S. sanctions, according to traders and shipping data.
