Oil News: WTI Nears Key Fibonacci Support Zone as Oil Demand Outlook Weakens

Light Crude Slips Toward Key Support as Supply Pressures Mount

Light crude oil futures are edging lower on Friday, consolidating for a third straight session as traders weigh growing global supply against weak demand signals. WTI crude remains under pressure, heading for its third consecutive monthly decline, dragged by a stronger U.S. dollar and sluggish economic data from China.

At 09:47 GMT, Light Crude Oil Futures are trading $60.24, down $0.33 or -0.54%.

Dollar Strength and China Data Pressure Prices

A firming U.S. dollar continued to weigh on commodity markets, limiting appetite for dollar-denominated assets like crude. The greenback gained traction after Federal Reserve Chair Jerome Powell pushed back on expectations for a December rate cut.

Meanwhile, sentiment took another hit after official data confirmed that China’s factory activity contracted for a seventh consecutive month in October, reinforcing concerns about tepid demand from the world’s second-largest oil consumer.

Supply Growth Outpaces Demand

The market is grappling with a clear oversupply narrative. According to analysts, October’s roughly 3% drop in both Brent and WTI reflects a structural imbalance as global production increases outpace demand growth. Recent reports show OPEC and key non-OPEC producers have added more than 2.7 million barrels per day to the market, representing about 2.5% of global supply.

Top exporter Saudi Arabia posted crude exports of 6.407 million bpd in August—the highest level in six months—with volumes projected to rise further. In the U.S., the Energy Information Administration reported record production of 13.6 million bpd last week, underscoring persistent supply pressure.

OPEC+ Output Decisions Loom Ahead of Sunday Meeting

Market attention is now focused on the upcoming OPEC+ meeting, with sources indicating the group is leaning toward a modest output boost in December. This stance contrasts with ongoing Western sanctions on Russian exports, which have yet to significantly impact flows to top buyers China and India.

Although U.S. President Donald Trump suggested China may begin large-scale purchases of American oil and gas, analysts remain cautious. Barclays noted that Alaska, the likely source of any energy exports under the potential deal, accounts for just 3% of total U.S. crude production, minimizing its market impact.

Oil Prices Forecast: Bearish Outlook Holds as Technicals and Fundamentals Align

With WTI crude failing to hold recent lows and approaching a key Fibonacci support zone between $59.27 and $58.49, downside risks remain elevated. A breakdown below the 61.8% retracement at $58.49 could trigger further selling and open the door to a retest of the October 20 low at $55.96.

Upside potential appears capped by the 50-day and 200-day moving averages at $61.45 and $61.97, respectively. Unless a fundamental shift occurs, oil prices are likely to remain under pressure in the near term.

More Information in our Economic Calendar.