Crude Under Pressure as Weak Demand and Rising Stocks Deepen Bearish Outlook

Crude oil markets remain under pressure as a combination of weaker refinery activity, soft fuel demand, and ongoing geopolitical uncertainty weighs on sentiment. Recent data from the US Energy Information Administration showed a buildup in crude inventories amid reduced refinery runs and falling imports, signaling a slowdown in domestic fuel consumption. At the same time, global supply dynamics remain uncertain, with reports suggesting India may cut Russian oil imports and new Western sanctions targeting Russian energy assets. Despite these potential supply risks, crude prices continue to trend lower, reflecting broader market caution and subdued economic momentum.

Refinery Slowdown Lifts US Crude Stocks as Fuel Demand Softens

US oil refineries slowed down last week, processing about 15.1 million barrels per day, which is 1.2 million barrels less than the previous week. Refineries operated at 85.7 percent capacity, leading to lower production of both gasoline and distillate fuels such as diesel.

Crude oil imports fell to 5.5 million barrels per day, while exports and domestic output remained steady. As a result, US crude inventories rose by 3.5 million barrels to 423.8 million, though stockpiles are still about 4 percent below the five-year average.

Gasoline inventories slipped slightly, and diesel supplies dropped sharply by 4.5 million barrels, leaving them 7 percent below normal levels for this time of year. Propane inventories, however, have increased and are now well above average.

Overall fuel demand over the past month has been slightly weaker than last year, with gasoline use down about 3 percent and jet fuel demand down nearly 5 percent, reflecting softer consumption trends.

Oil Declines Despite Talk of Indian Cuts to Russian Imports and Fresh Sanctions

Oil prices edged higher on early Thursday as traders reacted to reports that India may scale back or halt imports of Russian crude, a move that could tighten global supply.

The potential shift comes after US President Donald Trump said Indian Prime Minister Narendra Modi pledged to stop buying Russian oil, though Indian officials have not confirmed the claim. Analysts said reduced Russian exports to India would support prices, especially as Ukraine’s drone strikes continue to disrupt Russian refineries.

Meanwhile, the U.K. imposed new sanctions targeting Russian energy giants Rosneft and Lukoil, along with several oil terminals and ships in the so-called shadow fleet. Traders see these developments as setting a floor for oil prices after recent declines driven by US-China trade tensions.

Technical Analysis

Crude oil has retreated more than 28% from the January 15 high of $79.30, pressured by escalating geopolitical tensions, weakening global demand, and renewed trade uncertainty. The initial reversal was signaled by a bearish Harami candlestick, indicating fading upside momentum, and was later confirmed by a “Death Cross” pattern, where the 20-period Exponential Moving Average (EMA) crossed below the 50-period EMA, marking a clear transition from an uptrend to a bearish phase.

Momentum indicators continue to reinforce downside pressure. The Relative Strength Index (RSI) remains below the neutral 50 threshold, signaling sustained selling interest, while the Momentum Oscillator holds beneath the 100 level, reflecting persistent bearish sentiment and subdued buying strength.

Key resistance levels are identified at $60.15, $62.42, and the recent peak at $66.12. On the downside, support is seen at $55.12, $54.21, and $52.80. Unless price action reclaims key moving averages with improving momentum, the broader outlook remains biased to the downside.

Conclusion

Overall, the crude oil market continues to face a challenging environment marked by soft demand, rising inventories, and fragile global sentiment. While potential supply disruptions from Russia and shifting trade dynamics could lend temporary support, fundamentals remain weak, with refinery throughput falling and consumption easing. Technically, prices remain under bearish pressure, and without a clear rebound in momentum or improvement in demand indicators, the path of least resistance for crude appears to remain to the downside in the near term.