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Oil News: Summer Demand Fades, Russian Crude Returns—Bearish Signal for Oil Futures

By:
James Hyerczyk
Published: Aug 28, 2025, 11:33 GMT+00:00

Oil demand weakens post-Labor Day as Russian flows resume. Crude faces downside risk below 200-day moving average, pressuring near-term outlook.

Crude Oil News

Crude Oil Slips as Summer Demand Wanes and Russian Supply Resumes

Daily Light Crude Oil Futures

Light crude oil futures are under pressure on Thursday, retreating from recent gains as traders weigh seasonal demand trends and evolving geopolitical developments. Prices are currently capped by key technical resistance at the 50-day moving average of $64.70 and the long-term 50% retracement level at $64.56.

Support remains firm at the 200-day moving average of $63.24. A decisive break below this level could trigger a drop toward the monthly low of $61.12. On the upside, short-term resistance lies at $65.10, followed by $65.41 and $66.18—an area viewed as a potential trigger point for a sharper rally targeting $69.69.

OPEC Supply Moves Take Back Seat to Seasonal Demand Drop

After a midweek rally driven by bullish inventory data, oil prices are slipping again as traders anticipate softer U.S. fuel demand following the Labor Day holiday. The end of the summer driving season typically signals a demand slowdown, with gasoline consumption already underwhelming expectations.

“Any short-term reasons to be friendly towards oil prices are diminishing,” said PVM’s John Evans, pointing to the seasonal demand drop and the resumption of Russian flows through the Druzhba pipeline.

The pipeline, which supplies Russian crude to Hungary and Slovakia, restarted following a brief outage caused by a Ukrainian drone strike inside Russian territory. The restoration of these supplies has added pressure to prices, offsetting some of the optimism from Wednesday’s 2.4 million barrel U.S. crude stock draw, which had exceeded expectations of a 1.9 million barrel decline.

Geopolitical Tensions Build but Market Impact Muted

While geopolitical risk remains elevated, its influence on crude prices has so far been limited. Russia and Ukraine continue to escalate strikes on energy infrastructure, with a recent Russian drone attack impacting gas transport networks across six Ukrainian regions. Still, these events have not yet triggered a material supply disruption.

Meanwhile, traders are monitoring India’s response to increased U.S. tariffs. Despite Washington’s pressure to curb Russian crude imports, India is expected to maintain purchases, potentially buffering global supply concerns.

Oil Prices Forecast: Bearish Near-Term Bias Below Key Resistance

With fading summer demand, restored Russian supply, and resistance levels holding firm, the near-term oil prices forecast skews bearish. Unless bulls can push through the $66.18 trigger point, traders should expect continued selling pressure, particularly if the 200-day moving average at $63.24 is breached.

More Information in our Economic Calendar.

About the Author

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.

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