During the latter part of Q4 2024, West Texas Intermediate (WTI) crude oil has remained firmly anchored around the $70 per barrel mark, demonstrating strong resistance against further declines. This level has proven to be a critical support, bolstered by OPEC+’s ongoing commitment to production cuts, which have now been extended into 2025.

OPEC+ Projections for 2025

OPEC+ has revised its global economic growth forecast for 2025 downward, from 3.1% in 2024 to 3.0%. This adjustment reflects challenges such as geopolitical tensions, high debt levels, and elevated interest rates. Despite the gradual decline in global inflation, it remains too high in key regions like the Americas, Asia, and Europe to warrant significant reductions in interest rates next year. Tight monetary policies are expected to weigh on economic expansion.

Demand for oil in 2025 is also projected to grow at a slower pace. By the end of 2024, global oil demand is estimated at 103.82 million barrels per day, an increase of 1.61 million barrels from 2023. However, in 2025, demand growth is expected to moderate to 1.4 million barrels per day, reflecting subdued economic activity in several key regions.

OPEC+ has reaffirmed its commitment to limiting production in response to reduced economic growth and demand forecasts. The production ceiling for member and allied countries is set at 39.72 million barrels per day for 2025, down from 41.1 million barrels in 2024. Notably, this figure excludes additional voluntary cuts by some nations, including Saudi Arabia, which has consistently advocated for reduced output to stabilize prices.

WTI Price Movements and Technical Indicators

WTI has been trading within a lateral range defined by a ceiling at $85 per barrel and a floor at $70. These levels have been pivotal in shaping price movements throughout 2024. The $70 support level, which has been tested eight times since 2021, remains a formidable barrier to further declines. This range suggests a potential for significant bullish activity if prices move above key resistance levels.

Recent technical signals point to a shift in market momentum:

• MACD Crossover: For the first time since June 2024, the MACD line has crossed above the signal line, indicating reduced selling pressure and a potential for buyers to gain control.
• Positive Histogram: The MACD histogram is showing positive values, signaling growing bullish momentum.
• Bullish Divergence: Lower lows in the MACD lines combined with higher lows in the histogram suggest strengthening buyer activity, potentially leading to upward price corrections.

Key Levels to Watch

• $85 Resistance: Breaking this level could signal the start of a significant upward trend in 2025.
• $76 Intermediate Resistance: Aligned with the 50 and 100-period moving averages, crossing this point could challenge the bearish trend that has dominated since 2022.
• $70 Support: A crucial level that has consistently prevented further declines. Sustained movements above this level could reverse the bearish outlook, while breaks below it may reignite the downward trend.

2025 Outlook

As OPEC+ maintains production constraints and the $70 support level holds firm, WTI crude oil could be poised for a bullish breakout in 2025. The combination of reduced selling pressure, technical momentum, and constrained supply suggests an environment ripe for price recovery. However, economic uncertainties and demand fluctuations will continue to play a critical role in shaping the market’s direction.