Key Points:
- CL-OIL (WTI) fell 2.58%, closing at $69.07, after hitting a low of $68.67.
- China’s slow recovery and U.S. economic concerns weigh on demand while Russia-Ukraine talks raise expectations of lifted sanctions, increasing supply risks.
- OPEC+ may delay output hikes, while U.S. sanctions on Iran provide some support.
- U.S. crude inventories unexpectedly dropped by 0.6M barrels, defying a 2.3M build forecast.
CL-OIL Struggles Below $70 Amid Demand and Supply Risks
CL-OIL (WTI) slid to $69.07 per barrel, extending its decline after touching a session low of $68.67. Concerns over China’s sluggish recovery and U.S. economic uncertainty–the recent Trump-sparked trade tensions, inflationary pressures, and declining consumer confidence to name a few–continue to weigh on demand, keeping oil prices under pressure.
Market sentiment remains cautious as Russia-Ukraine peace talks progress, raising expectations of sanctions on Russian oil being lifted, which could boost global supply. However, losses were limited by U.S. sanctions on Iranian crude and speculation that OPEC+ may delay planned output increases, providing temporary support.
Technical Outlook: CL-OIL at Key Support
Picture: Crude oil slides to $69.070, testing support as bearish momentum dominates, as seen on the VT Markets app.
CL-OIL (Crude oil/WTI) dropped 2.58%, closing at $69.070 after opening at $70.902. The session saw a sharp decline, hitting a low of $69.030, while resistance was tested near $71.24 before the reversal.
The moving averages (MA 5,10,30) indicate a strong bearish trend, with short-term MAs diverging below the longer-term trend. The MACD (12,26,9) remains in negative territory but shows signs of potential recovery as the histogram turns green.
Key levels to watch include $68.67 as immediate support, while resistance at $71.295 could limit upside movement. A sustained break above resistance may shift momentum, while failure to hold support could extend losses.
U.S. Crude Inventory Decline Offers Some Support
The API reported a 0.6M barrel draw in U.S. crude inventories, defying forecasts of a 2.3M barrel build. The unexpected decline suggests resilient demand, helping prevent a steeper selloff in oil markets.
Market Outlook
CL-OIL remains vulnerable to demand uncertainty and shifting supply dynamics. Traders will closely watch OPEC+ decisions, U.S. economic data, and developments in Russia-Ukraine peace talks, which could significantly impact short-term price action.
