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Traders are now eyeing the retracement zone between $72.11 and $73.78, which represents the 50% to 61.8% Fibonacci levels of the main range from $65.01 to $79.20. This zone remains the key upside target for the current rally. However, with prices approaching five-week highs near $75, profit-taking could materialize on the first test of this resistance band.
At 11:02 GMT, Light Crude Oil Futures are trading $71.69, up $0.21 or +0.29%.
Tariff Risks and Sanction Headlines Stir Supply-Demand Uncertainty
Crude prices are being supported by escalating geopolitical risks after former U.S. President Donald Trump vowed to impose secondary tariffs of 25% to 50% on Russian crude buyers should Moscow obstruct peace efforts in Ukraine. Additional threats were directed at Iran, including the possibility of military strikes if nuclear talks fail. These developments have sparked fears of potential supply disruptions, particularly affecting major importers like China and India.
However, these bullish supply-side risks are countered by bearish demand concerns. A Reuters poll of 49 economists and analysts underscored market headwinds from softer economic growth in China and India, exacerbated by broader U.S. tariff policy. SEB analyst Ole Hvalbye noted the conflicting signals, citing that while sanctions may limit supply, tariffs and slower global growth are poised to cap demand—creating a tug-of-war that complicates directional conviction for oil traders.
Kazakhstan Supply Snag Adds Temporary Support
Adding to supply-side uncertainty, Russia has ordered the closure of two of three moorings at Kazakhstan’s main oil export terminal, a move linked to ongoing disputes between Kazakhstan and OPEC+ over production volumes. This disruption is expected to force Kazakhstan to cut output, with repair efforts at the Caspian Pipeline Consortium terminal projected to last over a month.
Meanwhile, OPEC+ is expected to stick with a modest 135,000 bpd production increase for May, in line with its April policy. Traders are also looking ahead to the April 5 OPEC+ ministerial meeting for confirmation.
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