The international crude oil market closed steady this week. Brent crude oil futures rose 0.08% to $72.94 per barrel, while WTI crude futures rose 0.12% to $69.46 per barrel. This week, crude oil futures for the two major indicators fell by about 2.5% cumulatively. While the market is weighing expectations of US interest rate cuts and demand prospects, the dollar correction has provided some support for the crude oil market.

The cooling of US inflation has led to a weakening of the US dollar, which is theoretically beneficial to crude oil prices. However, the hawkish signals released by the Federal Reserve after the year-end meeting weakened market expectations for a sharp interest rate cut in 2025. Although the US dollar has fallen from a two-year high, it is still expected to rise for the third week in a row, indicating the market's continued concern about the tightening of the Federal Reserve's policy. Federal Reserve officials have made it clear that the possibility of suspending interest rate cuts in 2025 is rising, further curbing market risk appetite. The slowdown in inflation and the market's dual focus on monetary policy have caused the crude oil market to fluctuate.

Market concerns about the outlook for demand have further intensified. Sinopec indicated in its annual energy outlook that China's crude oil imports are expected to peak in 2025, and oil consumption will peak in 2027. This statement strengthened the market's expectations of a slowdown in global demand for crude oil. Combined with OPEC+ lowering the 2024 global oil demand growth forecast for the fifth month in a row, the market generally expects supply and demand to ease in the future.

Trump's tariff remarks have also added uncertainty to the market. He warned that if the EU does not increase imports of oil and gas from the US, it may face a new tariff policy. This statement further complicates market sentiment. Against the backdrop of slow global economic recovery, trade frictions may increase fluctuations in the crude oil market.

On the supply side, J.P. Morgan expects the oil market to have an oversupply of 1.2 million b/d in 2025, mainly due to continued increases in production in non-OPEC+ countries. The bank predicts that non-OPEC+ production will increase by 1.8 million b/d, while OPEC will keep current production unchanged. Expectations of oversupply further dampen the room for oil prices to rise.

On a technical level, oil prices failed to break through the $70 mark on Friday, and the short-term upward trend was blocked. Brent crude oil has become a key resistance level near $72. If it can break through effectively, it will further challenge the 100-day EMA of $70.82 and $75.27 levels. However, considering that the end of the year is approaching, there is a lot of pressure on the market to take back profits, and there is limited room for oil prices to rebound. The lower support level focuses on $67.12. Once it falls below, the 2024 low of $64.75 will be an important test.

Looking ahead, the crude oil market may maintain range-bound fluctuations in the short term, and investors need to continue to pay attention to the Federal Reserve's monetary policy trend and China's economic data. Furthermore, the global geopolitical situation and OPEC+ policy developments will also have an important impact on the oil market.

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