Brent Crude Update – Oil Prices Rally as EIA Reduces Oil Surplus Estimates
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Brent crude prices are up around 1.55% at the time of writing as the commodity attempts a sustained recovery.
U.S. government data revealed that oil and fuel supplies are lower than expected. U.S. government data on Wednesday showed crude oil stockpiles increased by 1.4 million barrels last week, which was smaller than the 2-million barrel increase that experts had predicted.
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The U.S. Energy Information Administration (EIA) has updated its forecast for oil surpluses in 2025 and 2026, lowering the expected surplus due to sanctions. The EIA now predicts a surplus of 100,000 barrels per day in 2025, down from the earlier estimate of 500,000 barrels per day. For 2026, the surplus outlook was reduced from 1 million barrels per day to 500,000 barrels per day. These updates, especially the 2025 updates could be a contributing factor to Oils recovery over the last two days.
This news comes after the American Petroleum Institute (API) said on Tuesday that U.S. crude Oil stockpiles grew by 4.247 million barrels, even as there were strong reductions in product supplies. Brent oil prices rose by 1.32%, reaching $70.48 at 10:20 a.m. ET, which is $1 higher than last week. Meanwhile, WTI prices increased by 1.55% to $67.28, just under $1 more compared to last week.
However, investors are still worried about a possible U.S. economic slowdown and how tariffs could hurt global economic growth.
Libya’s Mabruk Field Restarts Production After a Decade – Supply Concern?
Libya has started producing oil again at the Mabruk oilfield after being shut down for ten years, the Government of National Unity announced on Wednesday. Production began on Sunday at 5,000 barrels per day and is expected to grow to 25,000 barrels per day by July.
The Chairman of Libya’s National Oil Corporation, Masoud Sulaiman, said the country aims to boost its oil production from the current 1.4 million barrels per day to 2 million barrels per day by 2028. To reach 1.6 million barrels per day as a short-term goal, Libya will need $3 to $4 billion. A new bidding round for oil licenses is planned, with cabinet approval expected before the end of January. Oil is crucial to Libya’s economy, making up more than 95% of its income.
Kuwait is also planning to increase its oil production. The CEO of Kuwait Petroleum Corp., Sheikh Nawaf al-Sabah, said at last year’s CERAWeek conference that the country wants to almost double its output. Kuwait aims to raise production from about 2.4 million barrels per day now to over 4 million barrels per day by 2035, working with international oil companies to achieve this goal.
The question is whether this will have any impact on the OPEC+ output increases scheduled to start in April. A lot of that appears to have been priced into Oil prices with the recent fall we saw, thus when the output increases begin the impact might be limited.
OPEC announced earlier today that it expects strong global oil demand growth in 2025, driven by air and road travel. The group noted that trade policies could cause ups and downs in the market, but they believe the global economy will adapt to these changes.
Week Ahead and Final Thoughts
Market sentiment is in a constant state of flux at the moment with new tariff announcements and proposals coming out daily. If this continues it would be wise to keep an eye on any comments which may have a negative impact on global growth forecasts. This in turn will weigh on Oil prices as demand concerns will increase.
Another area to keep an eye is the proposed deal with Russia and Ukraine with markets waiting to hear whether the rRussians will be willing to accept a ceasefire deal proposed by the US and Ukraine after their meeting in Saudi Arabia. A deal could alleviate sanctions on Russian crude and thus see an excess of supply enter the marker.
Technical Analysis – Brent Crude
This is a follow-up analysis of my prior report “Brent Oil Price Analysis: Six-Month Lows Amid OPEC Output, Tariffs & Russia-Ukraine Negotiations” published on 25 February 2025.
From a technical analysis standpoint, Brent has now achieved a change in structure at a key psychological level around the 69.00-70.00 mark.
Today’s daily candle close above the swing high at 70.83 puts bulls in charge for now, but there are a host of hurdles to navigate if Oil prices are to stage a sustained recovery.
The 14-period RSI has also moved away from oversold territory and approaching the neutral level at 50. If the RSI breaks above 50, this could embolden bulls even further as it could be seen as another sign that momentum may be shifting once more.
Immediate resistance rests at 72.38 and 74.68 before the psychological 75.00 handle comes into focus.
If the bullish momentum fades, immediate support rests at 70.00 and 69.52 before the 69.00 handle becomes an area to keep an eye on.
Brent Crude Oil Daily Chart, March 12, 2025
Source: TradingView (click to enlarge)
Support
Resistance
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