Oil News: Will Supply Shock Spike Crude Oil Above $66.49 Resistance?

WTI Crude Oil Holds Weekly Gains Near July Highs

Nearby WTI crude oil futures are edging higher on Friday, but inside yesterday’s range, suggesting trader indecision and impending volatility. Despite the minor setback, the market is holding on to weekly gains while trading near its highest level since July 31.

Since making a clean breakout over the 200-day moving average at $60.61 earlier in the week, crude oil posted three straight gains before hitting $66.48 on Thursday, just short of the $66.49 July top. Not only is this level resistance, but it’s also a potential trigger point for an acceleration to the upside with $69.80 the next major target.

At 16:28 GMT, March WTI Crude Oil is trading $65.87, up $0.45 or +0.69%.

Inside Move Signals Critical Decision Point

Despite the potentially bullish outlook, the market is vulnerable to the downside with the nearest support an uptrend line at $61.41 and a short-term 50% level at $60.66.

The inside move is the appropriate chart pattern at this time because it could be signaling an upcoming transition to “super bullish” or “mildly bearish”. Since we are experiencing a headline-driven rally, the chart pattern is saying, “give me some bullish news so I can breakout to the upside over $66.49”, or I’m going to fall back to support at $61.41 to $60.66 on bearish news or no news. It’s essentially a patience pattern. After taking the way of least resistance and rallying, it’s now facing a roadblock and needs fresh buying to overcome it.

Oil Needs Supply Shock, Not Tough Talk, to Break Higher

My technical description is supported by Ron Bousso of Reuters, who wrote on Friday that “oil needs an Iran supply shock, not tough talk, to break out of range.” He argues, “Tough talk on either side is unlikely to push crude prices much higher, given today’s well-supplied market. What would be needed is big-time action that results in a meaningful, sustained hit to the global-demand balance.”

Recent Geopolitical Events Failed to Sustain Price Gains

Interesting thought because even the nearly four-year-old war between Russia and Ukraine has failed to drive prices higher consistently, following an initial surge in February 2022. New OPEC+ output cuts in the middle of 2023 provided a boost for a few months before prices moved lower. The market continued to drop until early 2025 when Israel and Iran fought. Prices slid even further lower later in the year and into 2026, when President Trump’s threat against Iran brought in new life.

Technical Setup Suggests Market Anticipates Supply Disruption

So if you believe that the technicals precede the fundamentals like I do, then with prices steadily climbing this year from $55.65 on January 7 to yesterday’s high at $66.48, it appears to be ripe for a breakout to the upside over $66.49. The formation suggests the market is anticipating a supply disruption.

More Information in our Economic Calendar.