Oil News: Crude Drops on Demand Weakness, Profit-Taking, and Kurdish Oil Return

WTI Crude Eases After Hitting 3-Week High; Traders Eye Key Technical Levels and Supply Headwinds

Light crude oil futures are trading lower Thursday, pulling back after a sharp rally pushed prices to their highest level since early September. The retracement reflects profit-taking and a broader risk-off mood in financial markets, as traders assess mixed supply signals and weaker demand indicators heading into the slower winter season.

At 12:49 GMT, Light Crude Oil Futures are trading $64.63, down $0.36 or -0.55%.

Oil rallies above key technical resistance—can the momentum hold?

This week’s rally was ignited by back-to-back recoveries of the 200-day moving average at $63.05 and the 50-day moving average at $63.71. The upside momentum then pushed crude past a long-term pivot at $64.21—also a swing top—which flipped the short-term trend to bullish on the daily swing chart.

With this shift, the market opened the door to further gains, targeting resistance at a pivot level of $65.06, a main top at $65.68, and another pivot at $65.83. A sustained break above $65.83 could act as a technical trigger for another leg higher.

On the downside, swing chart support is seen at $61.61, $61.34, $61.10 and $60.77. The 50-day and 200-day moving averages now serve as critical support levels, and a breakdown below them would likely shift sentiment back toward the bears.

Federal Reserve comments and equity weakness weigh on sentiment

The broader market tone turned cautious following back-to-back down days in U.S. equities and remarks from Fed Chair Jerome Powell warning about stretched asset valuations. These factors added pressure to crude prices, as risk appetite waned across asset classes.

“We have a generally risk-off market,” noted UBS commodity analyst Giovanni Staunovo. Jorge Montepeque of Onyx Capital Group added that Powell’s comments further unsettled sentiment, spilling over into crude.

Supply-side pressure returns as Kurdistan flows poised to resume

Bearish undertones were reinforced by growing expectations that Kurdish oil flows may resume shortly. Eight oil companies have reached an agreement with Iraq’s federal and Kurdish regional governments, paving the way for resumed exports.

Priyanka Sachdeva of Phillip Nova said the return of Kurdish crude revives oversupply concerns, particularly as the seasonal demand peak fades. Haitong Securities echoed that view, noting that rising supply risks are not yet fully priced in. Meanwhile, J.P. Morgan flagged early signs of softening U.S. gasoline demand, reflecting cooling travel activity.

Outlook: Near-term bullish bias but upside capped by supply risks

The technical breakout above key moving averages and resistance zones signals short-term bullish momentum. However, headwinds from weak equity markets, resuming Kurdish exports, and softening demand suggest the upside may be capped unless new supply disruptions emerge.

Forecast: Bullish above 50-day moving average, but vulnerable to reversal if 200-day fails.

More Information in our Economic Calendar.