Oil prices are on course for a positive weekly start to the year.

Rising geopolitical tensions are feeding into supply-side fears, which have helped shore up oil.

Still, the darkening demand outlook is likely to cap oil’s potential for near-term gains.

At the time of writing, Brent is trading back above its 21-day simple moving average (SMA).

Note that oil was also whipsawed yesterday (Thursday, January 4th) following the latest report of rising US crude stockpiles in Cushing, Oklahoma along with falling US demand for gasoline.

Brent is set to be kept rangebound between $70 and the low-$80s.

A meaningful breakout may not arrive until markets can get more clarity over the global supply-demand equation as the year progresses.

Oil bulls would need to find conviction via meaningful gains in China’s economic recovery, along with rate cuts by major central banks in 2024.

More By This Author:

USD Softens After Stellar Start To 2024
2024 Preview: Potential Opportunities Ahead
Brent Set For First Yearly Drop In 3 Years