• Crude futures failed to breach the $66 per barrel ceiling earlier this week and have retraced their steps to a level last seen in roughly 2 weeks, as excess supply from major oil producing nations of the OPEC coalition allow the bears to stay in control.
  • Analysts expect the cartel to announce another production increase at their upcoming meeting, mirroring similar decisions seen earlier this year, where output was raised by 2.5 million barrels per day due to difficulty in shutting down
  • As for the weekly inventory data from the US, we saw earlier this week the unexpected rise of stockpiled crude by over 600k barrels, defying the expectation for a drawdown, which signalled a stalling of demand and kept prices below the $65 per barrel mark.
  • Slower demand outlooks were further justified due to seasonal reasons, since we move away from summer, a period of high usage and demand. EIA in its monthly short-term energy outlook downwardly revised its targets for crude to $50 per barrel at years end, forecasting that economic headwinds could further disrupt demand.
  • Geopolitical tensions on the other hand, hold the potential of keeping the commodity’s price afloat should escalations follow or possibly push WTI to levels last witnessed in mid-June of 2025.

Technical Analysis of Oil

WTI Chart – Crude retraces its steps to the south after hitting the $66 per barrel ceiling

wti/usd chart displaying a bullish trend with upward movement indicated by green lines and arrows.
  • Resistance: 65.60 (R1), 68.70 (R2), 72.50 (R3)
  • Support: 61.50 (S1), 58.00 (S2), 55.15 (S3)

Earlier this week, the bears managed to dismantle the bulls’ charge and keep the commodity below the $66 per barrel level, remaining steadfast, and in control. We maintain our bearish outlook bias for the commodity given the failed attempt to breach the $65.60 (R1) resistance ceiling, alongside the medium-term descending trendline and supporting our case is the RSI with a value of 44, showcasing modest bearish pressure and a jumpy -DI, accompanied with a contracting +DI, indicating the return of the bears’ strength.

Should the bears maintain control and extend their reign, we would reasonably expect to see a break below, $61.50 (S1) support level, and head south, towards the $58.00 (S2) support zone, and hit 3 and half month lows. Should on the other hand the bulls regain the initiative, we may see the commodity climbing above the $65.60 (R1) closest resistance level and after a successful break and head on to challenge the $68.50 (R2) area.