Oil News: Crude Slips Toward $65.33 as Traders Watch 200-Day MA Break Risk

Crude Oil Prices Slip as Trade Tensions Counter Stronger Chinese Demand

Light crude oil futures fell for a third straight session on Wednesday, testing critical technical levels as traders weighed conflicting supply and demand signals.

The market is now eyeing the 200-day moving average at $65.33 and the 50-day at $63.80. A decisive break below $63.80 could accelerate the selloff toward $58.22—an important downside target.

At 10:32 GMT, Light Crude Oil futures are trading $66.20, down $0.32 or -0.48%.

The first resistance sits at the long-term pivot of $67.44, followed by Monday’s three-week high at $69.65, and a 50% retracement level at $71.20. Price action remains rangebound, as improved demand indicators out of China and upbeat OPEC projections clash with mounting concerns over inventory builds and deteriorating global trade relations.

OPEC and Chinese Refiners Support Demand Outlook

OPEC’s latest monthly report expressed cautious optimism, projecting stronger global oil demand in the second half of the year. The group highlighted economic resilience in Brazil, India, and China, with signs of stabilization in the U.S. and EU.

Adding to the demand case, Chinese state-owned refiners are ramping up throughput following recent maintenance shutdowns. Analysts say the push is aimed at meeting rising third-quarter fuel consumption and rebuilding gasoline and diesel stocks that have fallen to multi-year lows. These signals have helped limit selling pressure, at least temporarily.

U.S. Crude Inventory Builds and Tariff Threats Cloud Market Sentiment

Offsetting the demand optimism is a fresh build in U.S. crude and product inventories. According to API estimates, U.S. crude stocks rose by 839,000 barrels last week, while gasoline added 1.93 million barrels and distillates climbed 828,000 barrels. The stock build suggests domestic supply remains ample even as refiners ramp up summer output.

Traders are eyeing the official EIA report for confirmation of a 1.8 million barrel crude draw, which could help stabilize prices if confirmed.

Meanwhile, global trade tensions are escalating. President Trump is threatening 30% tariffs on European imports starting August 1, a move that could severely impact two of the world’s largest economies.

The EU is preparing retaliatory measures targeting $84 billion in U.S. goods. Trump also warned of “very severe tariffs” on Russia if no Ukraine deal is reached within 50 days. Traders fear that such developments could drag down fuel demand globally.

Drone Strikes in Kurdistan Halt Output But Market Reaction Limited

Geopolitical risk resurfaced after multiple drone strikes forced production shutdowns at oilfields across Iraq’s Kurdistan region. Operators including Gulf Keystone, DNO, and Hunt Oil temporarily suspended activity after infrastructure damage near major fields. While the events disrupted operations, the market showed limited concern, as there were no injuries and most damage was assessed as manageable.

The muted price response reflects trader skepticism over sustained disruption, but repeated attacks could eventually force a repricing of regional supply risk.

Crude Oil Forecast: Bearish Bias Holds Below Key Technicals

Despite improving demand signals out of China and a more upbeat OPEC view, the technical picture remains fragile.

Crude is now testing the 200-day and 50-day moving averages, with a confirmed break below $63.80 likely to trigger heavier selling pressure toward $58.22.

Until prices reclaim $67.44 with conviction, the market outlook remains bearish.

More Information in our Economic Calendar.