Crude oil is set to close the week down by more than 5%, pressured by worries about demand

WTI oil prices are consolidating for the second consecutive day after a sharp drop earlier in the week but maintain a strong bearish outlook below the key $80 level.

Oil is on track for its largest weekly decline (around 5.6%) in over three months, pressured by increasing demand concerns due to worsening geopolitical situations and the expectation of sustained high borrowing costs in the US. Additionally, signals that the OPEC+ group may extend supply cuts beyond June contribute to the bearish sentiment.

The technical outlook on the daily chart is weakening, with daily Tenkan and Kijun-sen remaining in a bearish configuration and prices continuing to gain negative momentum.

Thursday’s close below the $80 pivot (Fibonacci 38.2% of $67.70/$87.61, 200DMA, and psychological level) has generated strong bearish signals. A weekly close below this level would confirm the bearish outlook and potentially pave the way for a test of targets at $78.02/$77.65 (100DMA and 50% retracement) and key support at $76.85 (base of the rising daily Ichimoku cloud).

Limited corrective rebounds may precede a fresh downward push, as daily studies indicate oversold conditions.

Broken supports at $80.00 and $80.50 (daily cloud top) should ideally limit any upside corrections and maintain the overall bearish trend.

Key resistance levels are situated at $81.38 and $81.72 (55DMA and 10DMA, respectively), and a sustained break of these levels would challenge the bearish outlook.