Oil News: Crude Oil Falls Below 200-Day Moving Average as OPEC+ Eyes Output Hike

Crude Oil Slips Below Key Moving Averages as OPEC+ Supply Outlook Weighs on Market

Light crude oil futures extended Monday’s steep sell-off, trading lower on Tuesday and decisively below their 200-day moving average at $63.08. The move reinforces bearish sentiment, as both the 50-day and 200-day moving averages now serve as resistance, sitting at $63.66 and $63.08 respectively. Technical traders tracking these indicators view the breakdown as a shift toward a bearish trend, with momentum now skewed to the downside.

At 10:31 GMT, Light Crude Oil Futures are trading $62.76, down $0.69 or -1.09%.

OPEC+ Output Increase Fuels Supply Surplus Expectations

Crude oil’s retreat is largely driven by renewed expectations of oversupply. OPEC+ is expected to approve a production increase of at least 137,000 barrels per day at its upcoming Sunday meeting, according to sources familiar with the group’s discussions. Despite the group consistently producing below its quota, traders reacted negatively to the signal of additional barrels entering the market.

This bearish outlook gained further traction after the long-delayed resumption of oil exports from Iraq’s Kurdistan region via Turkey. The first shipment in more than two years was confirmed by Iraq’s oil ministry over the weekend, resolving a prolonged export impasse and adding to the perception of increasing global supply.

Technical Picture Remains Split Between Moving Average and Swing Chart Traders

While moving average traders see a clear breakdown, swing chart traders offer a more nuanced view. They consider the trend still technically up, so long as WTI holds above recent swing bottoms at $61.61, $61.34, $61.10, and $60.77. A break below these levels would confirm a shift to a downtrend, with $66.42 marked as the current swing top.

The market’s indecision—caught between bearish moving average signals and bullish swing trends—has contributed to sideways price action and repeated breakout failures.

Geopolitical and Macro Risks Fade While Demand Concerns Mount

From a geopolitical standpoint, some risk premium may be eroding. U.S. President Donald Trump has secured support from Israeli Prime Minister Netanyahu for a U.S.-backed Gaza peace plan. Should the deal progress and lead to normalized shipping through the Suez Canal, some geopolitical risk could unwind, pressuring prices further.

At the same time, analysts at ANZ pointed to growing concerns around demand, particularly in light of a possible U.S. government shutdown. These macroeconomic risks further dampen sentiment, overshadowing any residual bullish signals from supply disruptions elsewhere.

Bearish Outlook as Market Trades Below Key Technical Support Levels

With WTI crude now trading below its 50- and 200-day moving averages, and fresh OPEC+ supply expected to hit the market, the path of least resistance appears lower. Unless swing support at $61.61 or lower holds, downside risk is building. The technical setup and fundamental backdrop currently support a bearish oil prices forecast.

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