Key Points:
- CL-OIL (WTI Crude) declines to around $66.42 per barrel on rising Russian supply concerns.
- OPEC’s planned output increases add further downward pressure.
CL-OIL Pressured by Russian Supply Prospects and OPEC Plans
CL-OIL (WTI Crude) futures extended recent losses, reaching as low as $66.42 per barrel on Tuesday. Prices faced pressure following news that Russian President Vladimir Putin agreed to stop attacks on Ukrainian energy facilities but rejected a 30-day ceasefire.
This decision has raised market expectations that Western sanctions against Russian oil exports might soon ease, allowing increased supplies onto global markets and putting downward pressure on prices.
OPEC’s decision to raise production from next month added to bearish sentiment. Increased output, combined with fears of higher Russian supply, may lead to excess crude in global markets, causing traders to hesitate before opening bullish positions.
Technical Analysis
Picture: Crude oil struggles at 66.570 as selling pressure mounts, with resistance seen near 67.50, as seen on the VT Markets app.
CL-OIL closed flat at 66.570, slightly down from the opening price of 66.572 after reaching a session high of 66.710 and a low of 66.420.
Crude oil prices initially surged to 68.48 before experiencing a sharp pullback, reflecting concerns over global demand and a strengthening US dollar. The moving averages (5,10,30) confirm the downtrend, with short-term MAs crossing below the longer-term average, signaling bearish momentum.
Meanwhile, the MACD (12,26,9) histogram remains in negative territory, with the signal line trending downward, suggesting sustained selling pressure.
Key support is near 66.00, with a breakdown potentially driving prices toward 65.50. Resistance sits at 67.50, and a break above this level could indicate a short-term recovery.
US Inventory Build Signals Softer Demand
Adding further downward momentum, recent industry reports revealed higher-than-anticipated builds in US crude oil inventories. Rising stockpiles signal weakening consumption in the face of global economic uncertainties, especially with trade disputes continuing to pose threats to growth. Traders remain cautious, anticipating further signs of demand weakness ahead.
Market Outlook
Given the current outlook, traders should remain cautious. Increased Russian supplies and expected OPEC output hikes may continue to pressure CL-OIL in the short term.
Conversely, traders should remain alert to any unexpected geopolitical developments from the Middle East, which could prompt sudden price reversals. Upcoming inventory reports and global economic indicators should be closely monitored for additional directional cues.
