Crude Oil (USOIL) Slides to $65 as RSI Hits 32—Will Bears Drag WTI Down to $63.43 Next?
Oil prices opened the week flat as traders digested the new EU sanctions on Russian energy exports and watched trade talks.
Quick overview
- Oil prices remained flat as traders assessed new EU sanctions on Russian energy exports and ongoing trade talks.
- Analysts suggest that the market is skeptical about the effectiveness of the sanctions, with potential risks from the EU's ban on refined oil products looming.
- WTI has broken below $65, indicating bearish momentum, with resistance levels identified at $66.42 and $67.06.
- Concerns over demand, particularly from China, and high US crude inventories are contributing to the bearish sentiment in the oil market.
Oil prices opened the week flat as traders digested the new EU sanctions on Russian energy exports and watched trade talks. Both Brent and WTI were around $69.32 and $66.14 respectively with minimal movement in the early session.
Analysts at ING said the lack of reaction showed the market was not convinced by the sanctions. However they noted the EU’s plan to ban refined oil products made from Russian crude in third countries could be a bigger risk in the coming weeks.
Meanwhile the broader macro narrative is all about uncertainty around President Trump’s tariffs which come into effect on August 1. Markets are getting more and more anxious about the impact on global growth and oil demand.
Technical Breakdown: WTI Breaks Key Channel
WTI has broken below $65 and is out of the rising channel that had supported prices since late June. It has failed to reclaim the 50-period SMA at $66.42 multiple times now and that is now resistance.
After rejecting $68.93, a multi-week high, sellers have been driving prices lower. Price is now hovering around $64.49, a short-term pivot. If this fails, the next level to watch is $63.43 and then $62.61.
Resistance Levels:
- $66.42 – 50-period SMA
- $67.06 – Former support, now resistance
- $68.93 – July high and major supply zone
Support Levels:
- $64.49 – Minor pivot
- $63.43 – June low
- $62.61 – Breakdown target
WTI is near oversold with RSI at 32.76 but for now the lack of buying shows the broader market is cautious.
Demand Concerns and Policy Signals Weigh Heavily
The bearish pressure isn’t just about the charts – it’s about the demand concerns. Recent softness in China – a key energy consumer – has raised doubts on short-term demand recovery.
And US crude inventories are still high, offering no relief to supply driven traders. Even with Middle East tensions simmering, the market is focused on soft fundamentals rather than geopolitical risk.And to top it off investors are waiting for the Federal Reserve to give clearer signals. If the Fed goes dovish later this year as some expect the US dollar could weaken and lift commodities. But for now oil bulls are waiting for more data before getting back in.
Final Thoughts
WTI below $65 confirms the bearish pressure and breaks the bullish channel that held through July. The 50-SMA rejection at $66.42 seals the deal that momentum has changed and unless bulls get back in quickly WTI could slide to $63.43 or $62.61.
RSI is oversold so watch for a sentiment shift or external macro trigger. Until then the trend is down and caution is the name of the game.
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