WTI Crude Oil Slips to $56.8 as Oversupply and Weak Demand Weigh on Prices
WTI Crude Oil futures took a tumble on Tuesday to around $56.80 a barrel - extending a multi-week slide as concerns over oversupply...
Quick overview
- WTI Crude Oil futures fell to around $56.80 a barrel, continuing a multi-week decline due to oversupply and slowing global demand.
- Crude oil stored on tankers has reached a record 1.24 billion barrels, indicating a significant supply glut and bearish market outlook.
- Traders are closely monitoring US-China trade talks for potential positive developments that could stabilize the market ahead of the Trump-Xi summit.
- The technical analysis shows a bearish trend with key resistance levels at $57.20-$57.40, while support levels to watch are $56.20 and $54.90.
WTI Crude Oil futures took a tumble on Tuesday to around $56.80 a barrel – extending a multi-week slide as concerns over oversupply and a slowdown in global demand are getting tougher to shake. The market is stuck firmly in a downward spin with sellers very much in the driving seat.
It’s getting harder to brush aside the signs of a potential supply glut. New numbers show that crude being held on tankers out at sea has hit a record 1.24 billion barrels. Whats more, its now a week by week increase – from 1.22 billion barrels just a week prior. The steady climb in storage is making it all the more clear that our consumption levels arent what they used to be and this, combined with rising inventories, is making for a decidedly bearish outlook in the oil market.
Looking ahead , traders are keeping all eyes on whats happening in US-China trade talks scheduled to take place in Malaysia this week. Any good news coming out of there could do wonders in steadying nerves ahead of that big Trump–Xi summit later this month.
WTI Crude Oil Technical Setup: Bearish Trend Still in Full Swing
Technically speaking, WTI Oil is stuck firmly in a downtrend. The price just can’t seem to get over the 20-day moving average which is still acting as a wall to keep it in check. We’ve also got a clear pattern of lower highs and lows which just confirms that the sellers are still calling the shots – but even they are starting to show signs of hesitation. Those spinning top candles in recent sessions suggest theyre waiting for a bit more of a signal.
The RSI has had a wee bounce from oversold territory but its still below 50 – which means buying momentum just ain’t there. If support at $56.20 starts to look shaky then the next targets to watch are $54.90 and $53.65 – and these fall in line with the lower border of the current channel.
WTI Crude Oil Short-Term Trade Opportunity
For now the short-term outlook looks like its leaning towards selling any rallies you see – unless of course oil manages to break back above those key resistance levels.
- Sell Zone: $57.20 – $57.40 ( Right around that 20-EMA resistance area)
- Take Profit: $56.20 and $54.90
- Stop Loss: If its above $58.20
A big bearish candle or a drop in the RSI to below 40 would confirm that the sellers are really back in charge. On the flip side, if the price manages to close above $58.00 then we could see a wee bounce up towards $58.95 – but make no mistake, the overall trend still looks like its pointing to weak oil prices.
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