Oil Price Outlook Dims Amid OPEC+ Supply Boost, Trade Woes
Oil price outlook dims amid OPEC+ supply increases and ongoing trade uncertainties
FUNDAMENTAL OVERVIEW:
WTI oil prices gave up gains on Thursday after a US Court of Appeals overturned a lower court ruling that had blocked Trump’s trade tariffs. This ruling revived trade uncertainties, raising concerns over global oil demand.
Meanwhile, the US government continues discussions with trade partners to secure “beautiful deals,” but progress remains limited. Talks with Japan are dragging on, and negotiations with China appear stalled, adding further pressure on crude prices.
OPEC+ is set to meet on May 31 and is likely to approve a supply increase of 411,000 barrels per day starting in July. Amid ongoing trade restrictions and a probable global growth slowdown, markets are increasingly concerned about a potential oil surplus.
Supporting this outlook, recent macroeconomic data from the US and the Eurozone show weakness. US GDP shrank by 0.2% in Q1, with consumer spending declining as businesses and consumers postpone purchases amid uncertainty over Trump’s unpredictable trade policies.
In Germany, April saw higher-than-expected layoffs and an unexpected drop in retail sales, highlighting sluggish momentum in the Eurozone’s largest economy.
On the upside, the US Energy Information Administration reported a surprising 2.8-million-barrel decline in crude inventories last week, contrary to forecasts of a 1-million-barrel increase, offering some price support.
CRUDE OIL TECHNICAL ANALYSIS CHART:
Technical Overview:
Crude Oil is trading within a up channel.
Crude Oil is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Negative trend.
Immediate Resistance level: 61.65
Immediate support level: 59.95
HOW TO TRADE CRUDE OIL
On the higher time frame, Crude Oil initially rallied sharply upward but then faced strong rejection, leading to a swift decline. It found support and attempted a rebound, but multiple rejections prevented sustained recovery. Currently, Crude Oil has broken its immediate support and formed a bearish engulfing pattern; if it remains below this level, further downside movement is likely.
