WTI Crude Oil (USOil) Price Forecast: $55.90 Slips as 2.5% Weekly Drop Tests Bear Channel
Oil prices ended the week under pressure, posting a second straight weekly decline as easing geopolitical risk reduced the urgency...
Quick overview
- Oil prices experienced a second consecutive weekly decline, with Brent crude down 2.3% and WTI down 2.5% due to easing geopolitical risks.
- Market focus has shifted to improving conflict de-escalation prospects, limiting the impact of supply disruptions on prices.
- Demand expectations remain cautious amid slower global manufacturing and uneven fuel consumption, hindering price rallies.
- Technically, WTI is bearish below $57.00, with immediate support at $54.99 and resistance around $57.00–$57.80.
Oil prices ended the week under pressure, posting a second straight weekly decline as easing geopolitical risk reduced the urgency around supply disruptions. Brent crude fell about 2.3% on the week, while WTI declined 2.5%, reflecting softer risk pricing rather than a sudden demand shock.
Market attention has shifted toward improving prospects for conflict de-escalation and uncertainty around how shipping restrictions and sanctions will be enforced. These risks affect a relatively small share of global supply, roughly 1%, limiting their ability to materially tighten the market. Analysts say the fading risk premium has weighed on prices more than any single headline.
Bank of America noted that while prices have weakened, lower levels could discourage marginal supply growth, reducing the likelihood of a sharp downside acceleration.
Demand Signals Remain Fragile
Beyond geopolitics, demand expectations remain cautious. Slower global manufacturing activity and uneven fuel consumption trends continue to cap upside momentum. Without a clear pickup in demand, rallies are struggling to gain follow-through, especially as inventories remain broadly manageable.
Markets appear to be recalibrating toward a lower trading range rather than pricing in a supply shock scenario.
WTI Technical Picture Stays Heavy
From a technical perspective, WTI is trading near $55.90, holding within a well-defined descending channel in place since early December. Recent candlesticks show smaller bodies and lower highs, a sign that selling pressure is slowing but not reversing.
Price remains below the 50-EMA at $57.02 and the 100-EMA near $57.78, keeping the short-term structure bearish. The channel midline has rejected recent bounce attempts, reinforcing $57.00 as a key resistance zone.
On the downside, immediate support sits near $54.99, followed by $54.26, which aligns with the lower channel boundary and a prior reaction low. The RSI near 43 points to weak momentum without oversold conditions, leaving room for another push lower if support gives way.
Short-Term Trade Setup
- Bias: Bearish while below $57.00
- Resistance: $57.00–$57.80
- Support: $54.99, then $54.26
- Trade idea: Sell rallies below $57.00, targeting $54.30, with a stop above $58.20
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