Oil News: 50-Day Average Caps Crude Gains Ahead of Key OPEC+ Production Decision

Light crude slips below key support levels—Is more downside ahead?

Light crude oil futures settled at $64.01 on Friday, down $0.59 or 0.91%, closing beneath both the 50-day moving average at $64.60 and a long-term pivot at $64.56. This weekly decline marked the end of a tough month, with oil shedding 6.47% in August. Key resistance levels now stand at $65.10, $65.41, and $66.18—the latter being a technical trigger that could spark a bullish breakout toward $69.69. Until then, any upside move is likely to remain capped.

On the downside, the 200-day moving average at $63.26 is the critical support level. A break below that would likely open the door to $61.12—the August 13 low—and potentially to $56.09 if bearish momentum accelerates. Technically, the path of least resistance remains lower unless bulls can clear $66.18 with conviction and a supporting catalyst.

OPEC+ output gains weigh on oil prices forecast

Traders are now focused on next week’s OPEC+ meeting, with expectations building that the group will continue ramping up production. Increased crude supply from the alliance is weighing heavily on oil prices, especially as demand in the U.S. appears to be cooling with the summer driving season coming to a close after Labor Day. Andrew Lipow of Lipow Oil Associates summed up the mood: “We’re going to see a jump in supply feeding into a lackluster demand market.”

U.S. inventory draw provides a short-term counterbalance

Despite the bearish tilt, some analysts point to tighter-than-expected U.S. crude inventories. Weekly data for the period ending August 22 showed stronger draws, particularly in industrial and freight sectors. This suggests that near-term demand may still have legs, offering a counterbalance to the bearish sentiment around global supply.

Geopolitics add short-lived price support

Earlier gains this week came from geopolitical tensions—specifically, Ukrainian drone attacks on Russian oil infrastructure. But with reports of a possible ceasefire being discussed among Ukraine’s European allies, bullish momentum faded quickly. Meanwhile, India continues to defy U.S. pressure to halt Russian oil imports, with volumes expected to rise further in September, reinforcing the theme of robust non-Western demand.

Bearish near-term outlook as OPEC+ output ramps up

With crude futures breaking below key technical supports and a supply increase from OPEC+ on the horizon, the oil market is tilting bearish. Unless the $66.18 resistance is breached with strong buying interest and a new catalyst, rallies are likely to be short-lived. A break below $61.12 could trigger a deeper sell-off. For now, traders should expect a market under pressure.

More Information in our Economic Calendar.