The energy market is witnessing an intriguing trend, marked by the fluctuation of crude oil prices which recently have shown a reliable upward momentumOn Monday, January 6, during the Asian session, West Texas Intermediate (WTI) crude oil traded at approximately $74.17 per barrel, reflecting nearly a 6% increase over the weekThis rise has been attributed to several factors influencing both technical and fundamental analysesTechnically, the daily charts have indicated a breakthrough from the established trading range, although the downward trend line remains unbrokenThe Moving Average Convergence Divergence (MACD) is showing signs of bullish acceleration, and analysts are keenly awaiting a golden cross formation between the moving averages, which would signal a stronger upward trend.

From a fundamental perspective, one of the critical catalysts for this price surge is the recent reduction in crude oil inventories reported by the Energy Information Administration (EIA). Concurrently, market sentiment is buoyed by prospects of economic stimulus in major Asian economies, serving to bolster oil prices amidst adverse weather conditions impacting the U.S

The colder climate forecasts for certain states in the U.Ssuggest an increase in demand for heating oil, which could offer further support for oil prices.

Data from Baker Hughes shows a minor decline in active oil drilling rigs in the U.S., with the number decreasing by one to a total of 482, which can also be seen as a supportive factor for prices, given that drilling activity is a commonly used indicator for future oil supply.

Overall, the current market landscape presents a unique confluence of bullish factorsThe resurgence of the global economy is driving increased energy demand, coupled with moderate cuts in production by oil-exporting nations, thereby stabilizing the supply side

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Notably, the coming week holds significance as the U.Sprepares to release its first non-farm payroll data of 2025. Positive employment figures could potentially reinforce expectations for interest rate cuts by the Federal Reserve, which could consequently lead to further advances in oil prices.

In this complex and ever-changing financial market environment, it is crucial to closely monitor market reactions to shifts in expectations surrounding Federal Reserve rate cutsAdditionally, it is important to note the recent easing of geopolitical tensions; key conflict areas are experiencing a cooling off, thereby significantly reducing the risk of disruptions to oil supplies, which adds pressure to bullish sentiment in the oil marketsInvestors need to remain vigilant, especially against the backdrop of the potential for oil prices to decline after reaching critical resistance levels.


Adverse weather conditions have also prompted winter storm warnings across 14 states in the U.S.

On January 4, it was reported that approximately 47 million people in the northern United States are under winter storm warnings, due to a new round of storms affecting the region.

This latest storm is expected to bring heavy rain, snow, and freezing weather, impacting travel for many citizens

The adverse weather can be traced from central Kansas, extending to the East Coast, anticipated to last until the 6th of January.

The probability of the Federal Reserve cutting interest rates in January stands at 11.2%, unchanged from the previous week.

According to the CME's FedWatch Tool, there is an 88.8% chance the Fed will maintain rates in January, while a 25 basis point rate cut is given an 11.2% likelihood.

By March, the probability of maintaining current rates is forecasted at 53.3%, with a cumulative chance of a 25 basis point cut at 42.2%, and a 4.5% probability for a cumulative cut of 50 basis points.

In the Middle East, there are ongoing tensions as Hamas and Israel have recommenced ceasefire negotiations, but disputes over the specifics of the agreement remain.

On Sunday, a Hamas official revealed that as part of a potential ceasefire deal, the group had agreed to release 34 Israeli hostages; however, the Israeli Prime Minister's office quickly stated that Hamas had not provided a list of hostages

Later that evening, Hamas provided a copy of the list to Reuters, containing the names of the 34 hostages it was prepared to release under a ceasefire agreement.

The United States has urged Israel to adhere to international law and take further actions to protect civilians, while simultaneously reaffirming its support for Israel's right to self-defense.

Israeli negotiators traveled to Doha on Friday, resuming talks with the help of Qatar and Egypt, with the U.Sgovernment also urging Hamas to reach an agreementHamas has stated its commitment to finalizing an agreement as soon as possible, although the extent of progress between the two sides remains unclearOne official remarked that any deal concerning the return of Israeli hostages would hinge on Israel's withdrawal from Gaza and a permanent ceasefire or end to the war.

From a technical standpoint, crude oil futures have managed to breach their previous resistance levels but are currently testing pressure from the descending trend line