On Thursday (January 2), US crude oil continued to rise during the Asian session, trading around $72.20 per barrel. Fundamentally, concerns about supply in 2025 still exist, but in the short term, due to expectations of demand recovery, oil prices are once again testing the upper edge pressure of the box.

However, it should be noted that we have not yet entered the reversal zone, and there has been no resonance between the supply and demand sides. In the short term, the technical rebound correction is still dominant.

Data released by the US Energy Information Administration (EIA) on Tuesday showed that US oil production increased by 259000 barrels per day in October, reaching a historic high of 13.46 million barrels per day, due to a surge in demand, reaching its strongest level since the pandemic.

EIA states that next year's production will reach a new record of 13.52 million barrels per day. However, some analysts believe that supply may tighten next year, depending on President elect Trump's policies, including sanctions.

He called for an immediate ceasefire between Russia and Ukraine, and may reintroduce the so-called maximum pressure policy towards Iran, which could have a significant impact on the oil market.

This trading day will see the number of initial jobless claims and EIA inventory data in the United States, beware of a surge or fall after the data is released.

CRISIL research director Sehul Bhatt pointed out that the increase in production from non OPEC countries is expected to ensure sufficient market supply. Although the economies of major Asian countries are expected to recover, the shift towards electric vehicles may limit demand growth.

Most survey respondents expect an oversupply in the oil market next year, with analysts at JPMorgan predicting that supply will exceed demand by approximately 1.2 million barrels per day.

A survey shows that global oil demand is expected to grow between 0.4 million and 1.3 million barrels per day by 2025, with OPEC estimating a demand growth of 1.45 million barrels per day for 2025.

Kim Fustier, Head of European Oil and Gas Research at HSBC, stated that overall, it is believed that the impact of the United States on oil prices and the domestic oil and gas industry is less than many people had anticipated.

However, some analysts point out that the Trump administration's strengthened sanctions on Iran's oil exports may provide support for oil prices in the short term.

The probability of the Federal Reserve cutting interest rates in January is 11.2%, which is basically the same as the previous trading day

According to CME's "Federal Reserve Watch", the probability of the Federal Reserve keeping interest rates unchanged in January 2025 is 88.8%, and the probability of cutting interest rates by 25 basis points is 11.2%.

The probability of maintaining the current interest rate unchanged by March 2025 is 49.7%, the probability of reducing interest rates by 25 basis points cumulatively is 45.3%, and the probability of reducing interest rates by 50 basis points cumulatively is 4.9%.

Technically speaking, the US crude oil daily line has rebounded significantly, once again approaching the upper edge pressure of the box, and the moving average is expected to turn upwards.

However, there is a need for adjustment after the short-term upward momentum of technical indicators is released. During the day, it is important to pay attention to whether the $73 integer level has been broken, in order to accelerate the bullish trend.

Daily chart of US crude oil