Oil Price Forecast: WTI Stalls at $65.05 as Traders Lock in Gains
Oil prices eased on Thursday after hitting a 7 week high as traders took profits and weighed supply and demand signals.
Quick overview
- Oil prices eased after reaching a 7-week high, with Brent at $69.05 and WTI at $64.70.
- Demand concerns are rising as US air passenger traffic growth slows and gasoline consumption retreats.
- Key factors to watch include US inventories, OPEC+ supply, and demand trends amid seasonal softening.
- Technical indicators suggest a potential breakout for WTI if it holds above $65.05, while a close below $64.20 could lead to a pullback.
Oil prices eased on Thursday after hitting a 7 week high as traders took profits and weighed supply and demand signals. Brent fell to $69.05 and WTI to $64.70. The pullback came after a 2.5% jump in the previous session sparked by a surprise decline in US crude inventories and renewed Russian supply risks.
But demand concerns are resurfacing. J.P. Morgan data showed US air passenger traffic in September rose just 0.2% year on year, a big slowdown from earlier months. Gasoline consumption is also retreating, mirroring weaker travel activity. Analysts warn that seasonal demand softening, plus OPEC+ production and Kurdish oil exports resuming, could tip the balance to oversupply.
Key to watch:
- US inventories: Drawdowns boosted prices but outlook is uncertain.
- OPEC+ supply: Production to weigh on Q4 balances.
- Demand trends: US travel slowdown means softer consumption.
Technicals Show Tension
WTI is at a key inflection point. Prices broke above the descending trendline that capped gains since August and are now just below $65.05, a resistance area with multiple rejections.
Candlestick action is spinning tops at this level – a sign of indecision. The RSI is 66, strong but overbought, and the 50 and 200 SMA have flattened, suggesting a trend reversal. Higher lows since mid September support the bullish view.
Outlook and Trade Ideas
The near term path for oil depends on whether WTI can hold above $65.05. A close above this level could see $65.49 and $66.03. Below $64.20 and it’s back to $63.27.
For traders:
- Bull case: Break and hold above $65.05 → targets at $65.49 and $66.03.
- Bear case: Rejection at resistance + close below $64.20 → pullback to $63.27.
Fundamentals say be careful, technicals say breakout. Demand is softening but supply risks remain. Trade the levels.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save