Oil WTI loses 1% retesting this year lows amid demand concerns, potential Iraq production rise and US - Russia talks 🚩

4:40 pm 25 February 2025

WTI Texas crude oil futures (OIL.WTI) are down nearly 1% today, testing the $70 per barrel level. One of the main factors driving the sell-off is growing concern over increasing global oil production, combined with uncertainty about the state of the global economy, including that of the United States. Inflationary pressure, along with weaker consumption data, may lead markets to conclude that the U.S. economy is losing momentum, potentially negatively impacting demand for WTI crude. An increase in supply typically exerts downward pressure on commodity prices.

  • On Saturday, Iraq announced that it is preparing to end the sanctions period on oil exports, which could increase global production by 185,000 barrels per day.
  • Peace talks between the United States and Russia regarding the ongoing three-year-long conflict in Ukraine are currently underway. Statements from the U.S. administration have given markets hope for an end to the conflict in Eastern Europe.
  • Following recent comments from Trump, speculation has risen that some sanctions on Russian oil exports could be lifted, further boosting global supply.
  • The United States is likely to focus on expanding hydraulic fracturing production, aiming to strengthen its position as one of the world’s leading oil producers. This approach would contradict OPEC’s previous efforts to curb overproduction in order to stabilize prices.

These developments have heightened concerns about a potential oversupply, especially since oil demand has not shown significant growth. Global economic growth forecasts for 2025 have been revised downward, suggesting that demand may remain stable or even decline. This scenario favors supply, which could further reinforce the downward trend in WTI prices.For OIL.WTI (H1 interval), key support appears to be located around the psychological barrier of $70 and $68 per barrel, as defined by the local lows of 2024.

 

Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.