Crude oil markets enter the back half of the week on uncertain footing, with traders closely monitoring a list of key economic releases that could sway sentiment. Upcoming data from Japan’s central bank, US jobless claims, manufacturing activity, and Friday’s all-important Non-Farm Payrolls report will help shape expectations for global growth and energy demand. Against this backdrop, crude prices remain under pressure, weighed down by bearish technical signals and growing concerns over supply expansion and macroeconomic headwinds.
Crude oil has been trending lower since reaching a high of 79.30 on January 15, with technical patterns and momentum indicators confirming sustained bearish pressure. The initial signal of weakness emerged with a Bearish Harami pattern, which was later followed by a decisive drop below both the 20-period and 50-period Exponential Moving Averages (EMAs), accelerating the downside move.
A failure swing also developed, as the peak at 74.42 failed to exceed the prior high—reinforcing the broader downtrend. The formation of a “Death Cross,” where the 20-period EMA crossed below the 50-period EMA, further validated the negative trajectory. Meanwhile, the Momentum Oscillator remains below the 100 line, and the Relative Strength Index (RSI) continues to hold under the 50 threshold, suggesting that bearish momentum remains firmly in place.
Key Resistance Levels
If buyers take control of the market, traders may shift their focus to the following four potential resistance levels:
62.87: The first level of resistance is identified at 62.87, which aligns with the weekly Pivot Point, PP, calculated using the standard methodology.
64.63: The second price target is determined at 64.63, corresponding to the high point from April 23.
69.89: The third price target is established at 69.89, representing the 61.8% Fibonacci Retracement drawn from the high point, 79.30, to the low point, 54.67.
71.86: An additional price objective is estimated at 71.86, mirroring the peak from April 2.
Key Support Levels
If sellers maintain control of the market, traders may focus on the following four key support levels:
57.77: The initial support level is seen at 57.77, representing the weekly support, S3, calculated using the standard Pivot Points methodology.
54.67: The second support level is positioned at 54.67, aligning with the trough reached on April 9.
48.51: The third downside target is noted at 48.51, corresponding to the 161.8% Fibonacci Extension drawn from the low point, 54.67, to the high point, 64.63.
38.55: An additional downside target is determined at 38.55, reflecting the 261.8% Fibonacci Extension drawn from the low point, 54.67, to the high point, 64.63.
Fundamentals
US crude oil inventories fell by 2.7 million barrels last week, defying expectations for a slight build, as exports rose and refinery activity picked up, according to the EIA. Production held steady at 13.47 million barrels per day, while gasoline inventories dropped for a ninth straight week, down 4 million barrels amid weaker demand. Distillate stocks rose unexpectedly, marking their first increase in four weeks. Overall, crude stockpiles are now about 6% below the five-year seasonal average.
Meanwhile, Crude oil prices steadied Thursday morning after a sharp sell-off triggered by concerns over Saudi Arabia’s potentially increasing supply and a surprise contraction in the US economy. Brent hovered near $61 while WTI held at $58, its lowest since March 2021. Analysts warn of further downside risks as weak demand, rising output expectations, and escalating trade tensions cloud the outlook.
Conclusion
Crude oil remains under pressure as markets digest a mix of bearish technicals and softening macro signals. With pivotal economic data still ahead—including US jobless claims, ISM manufacturing, and the closely watched Non-Farm Payrolls—market direction remains highly data-dependent. Unless demand prospects improve or supply risks re-emerge, oil prices could remain vulnerable to further downside in the near term.
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