Crude Oil struggles with $70.00 round level amid bleak 2025 outlook

• Oil prices are broadly flatlining near $70.00 for the second day in a row. 
• Traders are cautious due to the bleak Oil demand outlook. 
• The US Dollar Index trades above 107.00, the highest level in more than two weeks. 

Crude Oil trades roughly flat near $70.00 on Friday as investors remain reluctant to add to the rally seen earlier in the week. The OPEC+ report was a good element for Oil prices to head higher, but traders are still warning for the 2025 projections when President-elect Donald Trump will stay in the White House. Several commitments have already been put in place to drill more US Oil and become a bigger exporter in an already oversupplied market. 

The US Dollar Index (DXY) – which measures the performance of the US Dollar (USD) against a basket of currencies – is higher ahead of next week’s Federal Reserve meeting. The Greenback is seeing inflow again with interest rate gaps widening between US against Chinese and European rates, fueling a stronger Greenback. 

At the time of writing, Crude Oil (WTI) trades at $70.37 and Brent Crude at $73.90.

Oil news and market movers: Short term vs Long Term

• Oil producer Abu Dhabi National Oil Co., or Adnoc, has cut crude allocations to some Asian customers, according to equity and term lifters of the oil, Bloomberg reports.
• Weak fundamentals will pressure oil prices in 2025 as a looming supply glut mutes the effect of war risks, sanctions and OPEC+ cuts, Bloomberg analyst Pol Lezcano reports. 
• The year-end scramble by US Oil suppliers to lower their tax bills typically spurs a December jump in crude exports. But seasonally low inventories on the Gulf Coast are set to buck that trend, analysts say, Reuters reports.

Oil Technical Analysis: Careful now

Crude Oil prices might have rallied, but traders are cautious about adding to that rally. With the year-end and the prospects of a new US President that favors drilling more Oil, any upside looks limited. Expect any uptick or leg higher to be short-lived, with profit taking bound to happen before the 2024 comes to an end. 

The 55-day Simple Moving Average (SMA) at $70.06 is being tested and needs to see a hold and daily close above it in order to become support. Further up, $71.46 and the 100-day SMA at $71.12  will act as thick resistance. In case Oil traders can plough through that level, $75.27 is up next as a pivotal level. 

On the downside, it is too early to see if the 55-day SMA will be reclaimed again at $70.06. That means that $67.12 – a level that held the price in May and June 2023 – is still the first solid support nearby.  In case that breaks, the 2024 year-to-date low emerges at $64.75 followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart