Market sentiment remains fragile as key economic events, shifting supply dynamics, and technical signals shape the outlook. Crude oil has extended its decline, weighed down by growing inventories and macroeconomic uncertainty. While technical indicators suggest sustained bearish pressure, a decisive move below critical support could accelerate the downturn. At the same time, geopolitical developments and upcoming economic data may introduce volatility, influencing near-term price direction.
Overview
Market sentiment remains fragile as key economic events, shifting supply dynamics, and technical signals shape the outlook. Crude oil has extended its decline, weighed down by growing inventories and macroeconomic uncertainty. While technical indicators suggest sustained bearish pressure, a decisive move below critical support could accelerate the downturn. At the same time, geopolitical developments and upcoming economic data may introduce volatility, influencing near-term price direction.
Key Economic Events
Thursday 09:00 am (GMT+2) - UK: GDP m/m (GBP)
Thursday 09:30 am (GMT+2) - Switzerland: CPI m/m (CHF)
Thursday 15:30 (GMT+2) - USA: PPI m/m (USD)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday 15:30 (GMT+2) - USA: Retail Sales m/m (USD)
Technical Analysis
Since peaking at $81.004 per barrel on January 15, crude oil has declined over 12%, establishing a pattern of lower highs and lower lows. The downtrend was initiated by a Bearish Engulfing pattern, which drove prices below the 50-period Exponential Moving Average (EMA), signaling increased selling pressure.
Bearish momentum is further reinforced by technical indicators. The Momentum oscillator has dipped below the 100 baseline, while the Relative Strength Index (RSI) remains under 50, suggesting sustained downside risk. A decisive breach below the key support level of 71.141 will open the way for further declines, potentially accelerating the bearish outlook in the near term.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
0.72964: The initial resistance is 0.72964, which represents the weekly Pivot Point, PP, calculated using the standard methodology.
0.74121: The second price target is identified at 0.74121, corresponding to the swing high marked February 11.
0.76041: The third target is established at 0.76041, aligning with the daily high from February 2.
0.77864: An additional price target is estimated at 0.77864, which corresponds to the weekly resistance, R2, calculated using the standard Pivot Points methodology.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
0.71141: The first level of support is identified at 0.71141, representing the swing low from February 6.
0.69299: The second support level is 0.69299, reflecting the 161.8% Fibonacci Extension drawn from 0.71141 to 0.74121.
0.68064: The third support level is identified at 0.68064, corresponding to the weekly support, S2, calculated using the standard Pivot Points methodology.
0.66319: An additional downward target is observed at 0.66319, corresponding to the 261.8% Fibonacci Extension drawn from 0.71141 to 0.74121.
Fundamentals
Oil prices dropped about 0.5% on Thursday as optimism over potential peace talks between Ukraine and Russia raised expectations that sanctions on Russian crude could ease, alleviating supply constraints. Brent fell to $75.07 per barrel, while WTI declined to $70.87.
Additional pressure came from a larger-than-expected 4.1 million barrel build in U.S. crude inventories, signaling ample supply. Market sentiment was also weighed down by concerns over new tariff threats, which could slow economic growth and weaken oil demand. Meanwhile, inflation worries continue to push back expectations for interest rate cuts, adding to the bearish outlook.
According to the Energy Information Administration, U.S. refinery inputs rose to 15.4 million barrels per day, with capacity at 85%. Crude imports declined but remained higher year-over-year. Commercial crude inventories increased by 4.1 million barrels, though still 4% below the five-year average. Gasoline stocks fell, while distillate fuel saw a slight rise. Total petroleum inventories grew by 1.2 million barrels, with product demand up 2.8% over the past month.
Conclusion
Oil markets remain under pressure as rising inventories, macroeconomic uncertainty, and geopolitical developments weigh on sentiment. While technical indicators suggest continued downside risk, a decisive break below key support could accelerate the decline. However, volatility remains a factor, with upcoming economic data and geopolitical shifts potentially influencing near-term price action. Traders should remain cautious, monitoring key levels and broader market trends for potential shifts in momentum.