Crude Oil – Solid Weekly Rally Signals Rebound, but Weak Demand Outlook Weighs on Sentiment

WTI crude marked its second consecutive weekly gain, rising 3.3% this week, buoyed by growing optimism over easing trade tensions between the United States and the European Union, the prospect of a possible deal, fresh U.S. sanctions on Iran, and early signs of progress in U.S.-China trade talks.

A reversal signal is starting to take shape on both the daily and weekly charts, with the rebound from a fresh four-year low of $55.12 having retraced more than 50% of the $72.27 to $55.12 downturn. A Doji Morning Star pattern has also emerged on the weekly chart, adding to the potential for a trend shift.

However, the recovery still faces notable hurdles. Technical indicators on the daily chart remain largely negative, and the weekly structure is still decisively bearish, suggesting that a stronger push higher is needed to confirm a sustainable turnaround. A sustained break above the cracked 50% Fibo retracement level, reinforced by the daily Kijun-sen at $63.63, is seen as a minimum condition for further upside.

On the fundamental side, while recent supportive developments have lifted oil prices, the outlook remains clouded by OPEC and Energy Information Administration’s recent downgrades for oil demand growth. Concerns persist that if negotiations falter and trade tensions escalate, the current economic headwinds could intensify, potentially derailing the recovery in crude markets.

Res: 64.16; 65.22; 65.72; 66.08
Sup: 63.32; 62.65; 61.67; 60.00