Oil prices have been extending a steady uptrend under volatile market conditions. However, Bloomberg analysts note that oil has slowed its bullish momentum after a one-day spike—the largest jump in over five weeks. Oil is benefitting from a moderate pullback in the US dollar.

Last week, benchmark Brent crude traded near $73 per barrel following a 3.2% rise on Monday, November 18. In parallel, West Texas Intermediate (WTI) light crude climbed above $69 per barrel. Both contracts added 0.2% amid a brief depreciation of the greenback.

Crude oil received support after Norwegian company Equinor reported production cuts at the Johan Sverdrup oil field, the largest in Western Europe. The incident was caused by a power outage. Efforts to resolve the issue are underway, though the timeline for completion remains uncertain.

Besides, oil production at the Tengiz field, Kazakhstan’s largest, shrank by 28%–30%. The field is operated by the American company Chevron, and the slump is due to maintenance work. These unforeseen disruptions are contributing to a reduction in global supply. Repairs were expected to conclude by Saturday, November 23.

Despite these developments, analysts note that oil has been mostly in negative territory since the beginning of 2024. The drivers of the overall bear market include mounting concerns about energy demand in China and an oversupply of crude on the global market.

According to forecasts, the International Energy Agency (IEA) projects a surplus of 1 million barrels per day in 2025. This scenario is based on sluggish demand in China, which could get worse if OPEC and its allies resume production.

The planned production increases by OPEC+ and peak demand in China heighten the likelihood of global oversupply, Zhou Mi, an analyst at Chaos Research Institute, predicts. The current situation is exerting selling pressure on oil prices.