West Texas Intermediate (WTI) crude oil prices are showing signs of downward momentum, with the commodity testing key resistance at the $70 per barrel mark. Currently, WTI is shifting focus back toward support at $66.85 per barrel, as it faces ongoing bearish pressure.
Technical indicators highlight a prevailing downtrend. The 100-period simple moving average (SMA) remains positioned below the 200-period SMA, signaling that the path of least resistance is downward. This suggests that resistance at $70 is likely to hold rather than break. If bearish sentiment persists, a break below $66.85 could trigger a further decline, with potential losses mirroring the $9 height of the current descending triangle pattern.
The stochastic oscillator, while indicating continued bearish momentum, is nearing the oversold zone, suggesting that selling pressure may be weakening. A shift upwards from this region could signal a reversal toward bullish conditions. However, the Relative Strength Index (RSI) has more room to move lower, suggesting that selling pressures could extend further in the near term.
On the broader market front, WTI crude oil prices are recovering some ground, driven by growing optimism for a ceasefire between Israel and Hezbollah. Such a development would ease concerns over global supply disruptions, as production facilities in the region would face less risk of being affected by ongoing conflict. Additionally, the appointment of Scott Bessent as Treasury Secretary under former President Trump has buoyed risk assets, including energy commodities, as market participants expect the move to reduce the likelihood of an all-out trade war, potentially supporting long-term demand for crude.
Market participants are also keeping an eye on upcoming inventory reports from the U.S. Energy Information Administration (EIA) and the American Petroleum Institute (API). A build-up in crude oil stockpiles would signal weaker demand, potentially exerting further downward pressure on prices. Conversely, a reduction in inventories could point to stronger consumption or tighter supply conditions, possibly leading to upward momentum for crude oil prices.
In summary, while WTI crude oil is facing short-term downward pressure, geopolitical factors and economic indicators could provide catalysts for price shifts in the coming weeks.
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