WTI Holds Steady After Sharp Drop, Bearish Pressures Remain
Light crude oil futures are trading flat Friday, stabilizing after an earlier drop to $56.15—just above the key May 30 swing low of $55.27. This price action suggests tentative buying interest is emerging near technical support, though the broader market tone remains decisively bearish. A confirmed break below $55.27 could accelerate losses toward the $50.36–$47.51 zone.
At 13:24 GMT, Light Crude Oil Futures are trading $63.97, down $0.59 or -0.91%.
While there’s potential for a minor short-covering bounce, market structure remains weak. The 50-day moving average at $61.83 is below the 200-day moving average at $62.39, reinforcing a bearish setup. Until this crossover reverses, traders are likely to maintain a “sell the rally” approach, especially with no strong near-term resistance to cap gains.
Oil Prices Forecast to End Week Lower on Supply Glut Fears
WTI crude is on track for a roughly 3% weekly decline, pressured by growing concerns over global oversupply and geopolitical developments.
The International Energy Agency (IEA) this week projected a mounting oil glut into 2026, while the Energy Information Administration (EIA) reported a U.S. inventory build of 3.5 million barrels, far above analyst expectations. The build was linked to lower refinery utilization amid seasonal maintenance, while U.S. crude production hit a record 13.636 million barrels per day.
This data reinforces bearish fundamentals, as rising output and stockpiles signal waning near-term demand against persistent supply growth.
Geopolitical Shifts Could Undercut Supportive Tensions
Traders are also watching signals that U.S.-Russia relations could ease. Presidents Trump and Putin have agreed to hold a summit in Budapest within two weeks to discuss the Ukraine conflict. The move could dampen fears of escalating sanctions or disruptions in Russian oil flows, especially as Washington pressures India and China to scale back purchases.
Brent Oil Price Forecast
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See all Brent Oil forecastsAnalysts note that Ukrainian drone strikes on Russian refineries and the risk of secondary sanctions had helped support oil prices earlier. However, if the upcoming summit softens U.S. policy, this floor may erode.
China-U.S. Tensions Add to Demand Risk
In parallel, renewed trade tensions between the U.S. and China are undermining demand sentiment. Concerns over a potential economic slowdown are growing, especially as global manufacturing and consumption data show signs of cooling. As Jorge Montepeque of Onyx Capital noted, “It just demolishes confidence”—highlighting broader worries about weakening demand across key markets.
Bearish Outlook Prevails Despite Temporary Stabilization
The short-term outlook for crude oil remains bearish, with oversupply concerns, record U.S. output, and fading geopolitical risk support weighing heavily on sentiment. While a near-term rebound is possible on short covering, the underlying trend is unlikely to shift without a material change in supply-demand fundamentals.
More Information in our Economic Calendar.
