Crude Oil Market Analysis: Geopolitical Tensions and Demand Dynamics

On July 14, 2025, crude oil futures experienced a significant uptick, reaching a three-week high, primarily driven by escalating geopolitical tensions and robust demand signals from China. The West Texas Intermediate (WTI) crude oil prices broke above the pivotal $67.44 level, indicating a potential bullish trend as traders eye a resistance level at $71.20.

Market Drivers

The surge in crude oil prices is attributed to several key factors:

• Geopolitical Risks: The U.S. is poised to implement new sanctions against Russia, which could tighten global oil supplies. President Trump’s announcement regarding the deployment of Patriot missile systems to Ukraine has further escalated tensions, prompting bipartisan support for sanctions in Congress.
• China's Demand: China's crude oil imports have surged to a ten-month high, with a year-on-year increase of 7.4% in June, reaching 12.14 million barrels per day. This uptick reflects a strong near-term demand, although concerns about near-capacity storage levels could temper future price increases.

Technical Analysis

From a technical standpoint, WTI crude has demonstrated a bullish structure, having surpassed its previous weekly high and established a firm position above the $67.44 pivot. The immediate resistance level is identified at $71.20, which, if breached, could lead to further upward momentum towards the $78.40 resistance zone. Conversely, key support levels are noted at $67.44, the 200-day moving average at $65.31, and the 50-day moving average at $63.50.

Outlook

The outlook for crude oil remains bullish in the near term, bolstered by geopolitical risks associated with U.S. and EU sanctions on Russia, alongside strong import data from China. However, traders are advised to remain vigilant regarding potential releases of Chinese crude inventories into the market, which could limit price gains in the upcoming weeks.

Conclusion

In summary, the combination of geopolitical tensions and strong demand signals is likely to keep crude oil prices on an upward trajectory. A decisive break above the $71.20 resistance could further accelerate this bullish trend, while any significant changes in inventory levels could pose risks to sustained price increases.