The market remains supported by ongoing concerns over tightening supply and an improving outlook for demand. U.S. sanctions on Russian oil producers and tankers have restricted supply, further intensifying bullish sentiment. The expectation of colder weather in both the U.S. and Europe is also contributing to price gains, as the demand for heating fuels is anticipated to increase in the short to medium term.

Additionally, comments from Federal Reserve Governor Christopher Waller, suggesting that easing inflation could lead to interest rate cuts, have added further momentum to market sentiment. Stronger-than-expected economic data from China, including a higher-than-expected GDP growth rate and industrial production, has also bolstered expectations for stronger oil demand, reviving hopes for an economic rebound in the region.

However, crude prices face potential downward pressure from easing geopolitical tensions in the Middle East. Recent developments in the Red Sea, where the Houthi militia has agreed to halt attacks on ships as part of a ceasefire, have alleviated concerns about global shipping disruptions. This easing of geopolitical risk could reduce uncertainty in the market and mitigate potential supply bottlenecks.

As traders continue to monitor these developments, the market remains fixated on broader supply and demand dynamics, with particular attention to the ongoing impact of sanctions on Russian oil and potential shifts in U.S. monetary policy. The balance between tightening supply and improving demand expectations is likely to determine the direction of crude oil prices in the coming weeks.