Oil Markets Find Support as U.S. Demand Surges and Geopolitical Risks Recede

Brent and WTI crude prices stabilized over the last 24 hours, as official data and technical signals pointed to a market searching for equilibrium after a week of heavy volatility.

According to the latest Energy Information Administration (EIA) report, U.S. crude inventories fell by 5.8 million barrels last week, surpassing analyst expectations and reflecting robust demand at the peak of the American driving season.

Gasoline inventories also dropped sharply, while refinery utilization reached its highest level in nearly a year. These figures show strong consumption and refining activity, giving the market a solid fundamental base.

Brent crude futures edged up to $67.89 per barrel, while WTI settled at $65.08. Both benchmarks rebounded nearly 1% after steep losses earlier in the week, which followed the announcement of a ceasefire between Iran and Israel.

The ceasefire, brokered after direct U.S. involvement, reduced the immediate risk premium that had driven prices to five-month highs. However, market participants remain cautious.

They are watching for any sign of renewed hostilities or disruptions in the Strait of Hormuz, a vital route for nearly 20% of global oil flows. Asian demand also played a role in stabilizing sentiment.

Asia’s Crude Import Boom Meets Technical Turning Point

June saw a record surge in crude imports across Asia, led by China and India, according to LSEG Oil Research. China’s imports reached their highest level since March, while India’s volumes rose to their strongest since the same month.

This jump in shipments helped offset a slow start to the year for the region’s demand, but analysts question whether this momentum will persist as prices recover. Technical analysis of the Brent and WTI charts reveals a market at a crossroads.

On the four-hour chart, both benchmarks are holding just above major support levels—$65.77 for Brent and $62.73 for WTI. The Relative Strength Index (RSI) for both sits below 32, a clear sign of oversold conditions.

The Moving Average Convergence Divergence (MACD) remains negative, but the histogram shows that bearish momentum is slowing. Bollinger Bands are wide, reflecting recent volatility, with prices hugging the lower band, often a precursor to a short-term bounce.

The daily charts echo this picture. Prices have stabilized near key support, but remain below major moving averages, indicating that the short-term trend is still downward.

The RSI on the daily timeframe has started to recover from oversold territory, while the MACD remains negative but is no longer accelerating downward.

In sum, the oil market has found a fragile footing as strong U.S. demand and a technical oversold condition counterbalance lingering geopolitical uncertainty and questions about sustained Asian demand.

Traders will watch closely for further inventory data and any developments in the Middle East. The next move will depend on whether fundamentals can continue to offset the risk of renewed volatility.

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