WTI Oil – Bears Take a Breather Following Last Week’s 7.3% Decline

Oil prices ticked up slightly on Monday, holding within a narrow consolidation range after Friday’s 1.8% drop, triggered by disappointing US jobs data. The modest rise in early Monday trading was attributed to partial profit-taking and concerns over a potential hurricane system forming over the US Gulf.

However, the broader trend remains bearish, as oil prices continue to face pressure from fears of weakening global demand. This stems from poor economic data in the US and China, the world’s two largest oil consumers, and OPEC’s decision to increase output starting in October, which has overshadowed any positive impact from ongoing geopolitical tensions.

Oil prices dropped more than 7% last week, extending the latest bearish move from the $80.14 peak on August 12. Even signals of a potential US interest rate cut, which would typically boost oil demand, have failed to lift prices.

Technical indicators on the daily chart remain firmly bearish, further reinforced by the recent 50/200-day moving average death cross. However, oversold conditions suggest the possibility of a short-term pause or limited correction before the broader downtrend resumes.

The broken psychological support at $70 has now turned into initial resistance, followed by the former double bottom at $71.46/66 (lows from August 5 and 21), reinforced by the falling 10-day moving average ($71.90), which is expected to limit any upside attempts and maintain the larger bearish outlook.

Res: 69.03; 70.00; 70.79; 71.66
Sup: 68.00; 67.15; 67.00; 66.79