2025-09-17
Yes, $68 is acting as near‑term support for Brent, with dip‑buyers responding around that handle after a 1%‑plus rise on Russia‑linked supply risk while WTI steadies near $64 into the Fed decision window.
Brent is consolidating just above $68 after a prior session gain on geopolitical risk, with intraday tests finding buyers near the round number and ranges remaining tight.
WTI trades close to $64 in a similar pattern, reflecting a market that is balancing disruption headlines against macro caution and event risk around policy guidance.
The intraday tone is steady rather than exuberant, consistent with a market that is testing whether $68 holds on closing bases before attempting higher levels.
Recent reports of Ukrainian drone strikes on Russian refineries and export nodes have raised the risk of temporary throughput and product constraints, even if crude exports continue to flow. [1]
Follow‑on disruptions or logistics bottlenecks can support prompt balances and time‑spreads, which is why crude rallied over 1% before settling near the $68 handle to reassess the durability of any impact.
Talk of potential output adjustments has surfaced as operators address damage and routing, keeping a modest risk premium in place while markets monitor repairs and flows.
Ahead of the Federal Reserve's announcement, the dollar has softened and yields have eased, offering a mildly supportive backdrop for dollar‑priced commodities such as crude.
Gold has climbed to fresh highs alongside a softer dollar into the Fed, a useful read‑across for risk appetite and commodities.
A benign policy tone typically helps crude hold gains by easing financial conditions at the margin, whereas a growth‑downbeat or hawkish surprise could test bids in the high‑$67s.
Given the setup, first moves may hinge more on guidance and the dollar's path than on headline rates, which argues for range behaviour unless a surprise emerges.
Industry estimates showed a weekly crude stock draw of about 3.42 million barrels, a larger‑than‑expected decline that points to steady refinery runs and resilient end‑use demand at the margin. [2]
Official U.S. inventory data are released by the EIA in the Weekly Petroleum Status Report at 10:30 a.m. Eastern on Wednesdays, with the next publication scheduled today, which often confirms or challenges industry estimates.
A confirmed draw would strengthen the case that $68 is a working floor for Brent near term, while a surprise build could weaken support and shift focus back to macro drivers.
U.S. crude stocks: an official draw larger than expected would bolster the $68 floor and keep dips shallow.
Confirmed export bottlenecks in Russia: sustained constraints would justify a firmer risk premium and test $69.5–$70.
Fed tone and the dollar: a dovish‑leaning message that softens the dollar helps crude hold the range higher.
Risk‑off turn: a stronger dollar or equity wobble could push Brent into the high‑$67s before bids reappear.
| Set-up | Likely range drift | What to watch |
|---|---|---|
| Disruptions Persist | Respect $68 floor; probes toward $69.5–$70 on stronger backwardation | Follow-on strikes, refinery downtime, pipeline limits, prompt time-spreads |
| Benign Fed + Draws | Bias is higher within $68–$70 band as the dollar stays soft | Policy tone, EIA confirmation of industry estimates, dollar path |
| Risk-off + Easing tensions | Slip into $67.5–$68.2 with shallow bounces unless spreads firm | Dollar strength, softer equities, calmer Russia flow data, and logistics |
Tone: cautious‑firm as traders hedge event risk but retain light length after a prior session advance.
Positioning: interest in buying dips near $68 and taking partial profits near resistance, consistent with range trading.
Spreads: stronger backwardation would signal tightening prompt balances and add staying power to the $68 floor. [3]
Strikes that impair refineries primarily affect product output and can tighten diesel and gasoline balances, while disruptions to export facilities or pipelines can curtail seaborne flows more directly and widen differentials or lift time‑spreads faster.
The current risk appears to involve elements of both, which explains a measured flat‑price response alongside attention to spreads and logistics as traders parse the persistence of any constraints.
If core export routes remain serviceable and replacement flows can be arranged, the market tends to price a modest premium rather than a severe one despite headline volatility.
Because crude is priced in dollars, a softer dollar reduces the local‑currency cost for non‑U.S. buyers and can support demand at the margin, especially when rates are easing and financial conditions improve.
This channel is often enough to keep prices steady when geopolitical news is noisy and inventory signals are supportive, though it rarely overpowers large swings in underlying supply and demand.
A hawkish‑leaning message that firms the dollar and pressures risk appetite would likely bring a quick test of bids into the high‑$67s before fresh buyers step in.
Brent is treating $68 as near‑term support as the market weighs Russia‑linked supply risks, a softer dollar into the Fed, and industry‑flagged U.S. draws ahead of official confirmation.
Confirmation of a meaningful EIA draw and firmer front‑month backwardation would strengthen the case that the $68 floor holds, with $69.5–$70 the next area to watch on follow‑through.
Conversely, a surprise inventory build or a risk‑off shift would likely push Brent into the high‑$67s, where the market will test whether dip‑buyers remain committed.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment, or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person.
[1] https://www.reuters.com/business/energy/oil-retreats-geopolitical-jitters-cap-declines-2025-09-17/
[2] https://tradingeconomics.com/united-states/api-crude-oil-stock-change
[3] https://www.eia.gov/outlooks/steo/
