Oil News: Crude Oil Stuck Below Death Cross—Is $55.74 the Next Target?

Crude Oil Rebounds but Faces Technical Hurdles Near $60

Light crude oil futures are attempting a rebound early Monday after plunging to $58.22 on Friday, the lowest level since June 4. The bounce follows a heavy sell-off triggered by bearish technical breakdowns and heightened geopolitical and trade-related tensions.

Price action is now testing 61.8% Fibonacci resistance at $59.91—the same level that triggered Friday’s sharp drop. A sustained move above this level could open the door for a short-covering rally toward a minor pivot at $60.57. However, with the prevailing trend still bearish, sellers are likely to reassert control near that area.

At 09:46 GMT, Light Crude Oil Futures are trading $60.01, up $1.11 or +1.88%.

Key Resistance Clusters: Moving Averages Align Bearishly

Any upside continuation faces stiff resistance, with the 50-day moving average at $62.77, a swing top at $62.92, and the 200-day moving average at $62.98. Of note, the 50-day has crossed below the 200-day, forming a bearish “death cross” that signals long-term weakness. Unless bulls can overcome this cluster decisively, rallies are likely to be viewed as selling opportunities.

On the downside, a failure to hold $58.22 would signal renewed selling pressure, potentially exposing the next major support at $55.74.

U.S.-China Trade Tensions Keep Traders on Edge

Oil’s rebound is partially driven by renewed investor focus on a potential meeting between U.S. President Donald Trump and China’s Xi Jinping. The meeting, tentatively slated for later this month on the sidelines of the APEC summit in South Korea, could determine whether the current tariff standoff escalates or finds relief.

Last week’s oil selloff followed an expansion of Chinese rare earth export controls and Trump’s announcement of 100% tariffs on certain Chinese goods. Market participants remain highly sensitive to any signs of resolution or further deterioration in trade talks, which significantly impact global demand sentiment for crude.

China’s Crude Imports Provide Limited Demand Support

On the demand front, China’s crude oil imports rose 3.9% year-over-year in September to 11.5 million barrels per day, according to customs data. While the increase is notable, it has done little to offset broader demand concerns tied to trade uncertainty and regional conflict resolution in the Middle East.

Market Forecast: Bearish Bias Holds Below Key Technical Levels

Despite Monday’s modest rebound, the broader technical and fundamental outlook for crude oil remains bearish.

As long as prices remain capped below the 50-day and 200-day moving averages, rallies are likely to be sold. A break below $58.22 would confirm renewed downside pressure, targeting $55.74.

Until a firm resolution in U.S.-China trade tensions materializes, downside risks continue to dominate the oil prices forecast.

More Information in our Economic Calendar.